Oil prices rose slightly in Asian trading Tuesday, while Asian shares were mixed following Wall Street’s rally the previous day. Investors assessed last week’s joint U.S.-Japan currency intervention and its uncertain long-term effects.
Markets react to currency intervention
Japan’s Nikkei 225 edged up 0.3% to close at 63,957.53, as the U.S. dollar climbed to 157.70 yen from 157.18 yen. The euro inched up to $1.1515 from $1.1514. The dollar was trading at 160-yen levels before regulators stepped in to boost the yen’s value after it fell to nearly 40-year lows.
Analysts questioned whether the intervention would stabilize the yen. A report by BMI, a unit of Fitch Solutions, stated that a U.S.-backed operation carried more weight than Japan acting alone. The pledge of further action might deter speculators, but the U.S. contribution would likely be limited in scale.
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Matthew Ryan, head of market strategy at Ebury, described the move as significant. It marked an important moment for the yen, improving confidence in a cautiously optimistic outlook for the currency. However, the intervention did not address underlying economic factors such as inflation, interest rates, or the relative strengths of the economies.
Elsewhere in Asia, South Korea’s Kospi jumped 1.6% to 6,358.95, and Australia’s S&P/ASX 200 rose 1.4% to 9,145.80. Hong Kong’s Hang Seng slipped 0.6% to 25,863.30, while Shanghai’s Composite gained 0.3% to 3,822.28.
Traders remained more concerned about volatility in chip stocks. Semiconductor shares have fluctuated sharply in recent weeks due to doubts over the sustainability of AI-driven revenue growth. The instability has contributed to broader market unease.
Oil prices rebound after sharp drop
In energy trading, U.S. crude rose 12 cents to $80.46 a barrel, while Brent crude, the international benchmark, climbed 69 cents to $84.46. The increases followed a more than 5% decline Monday after U.S. President Donald Trump said over the weekend that he had decided to hold off on new strikes against Iran at the urging of allies in the region.
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Brent crude had fluctuated between $72 and $102 last month as worries rose and fell over the war in Iran and when oil tankers would be allowed to freely exit the Persian Gulf again to deliver crude to customers worldwide.
On Wall Street, stocks surged Monday as falling oil prices eased inflation concerns. The S&P 500 jumped 1.5%, leaving it just 0.1% below its record high from earlier this summer. The Dow Jones Industrial Average climbed 693 points, or 1.3%, to a new all-time high, while the Nasdaq composite leaped 2.1%.
The yield on the 10-year Treasury sank to 4.68% from 4.75% late Friday. It remains well above its 3.97% level from before the war with Iran.