Key facts
- The yen reversed intervention-driven gains, falling back into the 160 range against the dollar.
- Asian markets rallied, with South Korea's KOSPI seeing record gains.
- Microsoft and Amazon shares surged on strong cloud growth and AI investment demand.
- The Bank of Japan held interest rates steady but signaled potential future hikes.
- The Federal Reserve kept rates on hold, but three dissents and a convoluted press conference from the new chair raised concerns.
- 30-year Treasury yields reached a 19-year high of 5.2%.
The yen pared intervention-driven gains, slipping back into the 160 range against the dollar as corporate customers bought dollars, following suspected Japanese government intervention. Asian markets rallied, with South Korea's tech-heavy KOSPI seeing record gains, though chipmakers SK Hynix and Samsung saw their stocks fall despite strong profit reports.
Wall Street was lifted by positive results from Microsoft and Amazon, whose cloud growth and AI investments impressed investors. Microsoft's shares surged after beating forecasts, while Amazon reported its highest cloud revenue growth in over four years. This optimism spilled over into Asian equities.
Meanwhile, the Federal Reserve kept interest rates on hold, but three dissents and a convoluted press conference from new chair Kevin Warsh led to a significant steepening of the yield curve, with 30-year Treasury yields reaching a 19-year high of 5.2%. This suggests traders lack confidence in the Fed's long-term inflation control.
In other central bank news, the Bank of Japan held rates steady but indicated that inflation risks could lead to future hikes. The Bank of England also held rates steady in a 6-3 vote. The conflict in the Middle East saw oil prices fluctuate, dropping to $84 a barrel before spiking nearly 8% on news of attacks on U.S. bases and Egyptian gas vessels.