In the Asian market, stocks surged overnight, with the Nikkei rising 1.4% and the Hang Seng climbing 1.5% in Hong Kong. Despite data showing a larger contraction than expected in Japan’s economy in the first quarter, the yen strengthened due to a decline in US Treasury yields. Meanwhile, Wall Street saw a surge to all-time highs driven by milder US inflation and increased expectations of two interest rate cuts by the Federal Reserve this year. The S&P 500, Dow Jones, and Nasdaq Composite all reached record highs, with the S&P 500 jumping 1.2%, Dow Jones gaining 0.9%, and Nasdaq Composite advancing 1.4%.
On the forex market, the dollar continued to weaken against currencies like the euro and sterling. Gold prices trended back towards record levels as investors sought safe-haven assets amid global economic uncertainty. Crude oil prices also strengthened after a rebound from a two-month low overnight, indicating a positive outlook for energy demand in Asia and other regions of the world.
In Tokyo trading, US Treasury yields declined to six-week lows, which helped boost investor confidence and contributed to the rise in Japanese stocks. Despite this decline in yields, data showed that Japan’s economy contracted more than expected in the first quarter due to ongoing trade tensions and weak consumer spending.
Overall, these developments suggest that while there are some positive signs on Wall Street and commodity markets like crude oil and gold, investors remain cautious about global economic conditions given ongoing trade disputes between major powers like China and the United States.
