Briefing · Summit PostA look at the day ahead in European and global markets reveals Brent crude climbing to $100 a barrel, a level last seen in late July, driven by fresh Middle East fighting fears of escalation. This backdrop suppresses risk appetite in Asian equity markets, except for AI-related stocks. The yen defies expectations, rising to seven-month highs against the dollar despite Japan’s heavy reliance on imported energy.
Higher oil prices typically weaken the yen, but the yen’s rally stems from bets on faster Bank of Japan rate hikes and repatriated assets. Meanwhile, geopolitical tensions intensify with Iran targeting a U.S. base in Jordan and Iranian-backed Houthis striking Saudi cities. A Brent crude move above $100 could further destabilize markets already grappling with inflation concerns.
The AI trade shows cracks with a July correction, though recent exuberance has returned. SK Hynix’s rise and deals like Verizon-Corning’s boost data center plays, helping South Korea’s KOSPI advance. Japanese cable makers Fujikura and Furukawa Electric also gain as the Nikkei stays positive despite a soaring yen.
The yen’s rally, fueled by BOJ signals and algorithmic trading, nears Tuesday’s high of 152.89 per dollar. Analysts debate whether it has overshot, with fundamentals likely pulling it toward 155 by the BOJ meeting next week. Key events include the ECB’s rate hike on Thursday, U.S. inflation data on Friday, and Fed/BoE decisions next week.
Source: Euronext Markets: Real-time Stock Market Data | live
