The Japanese yen strengthened to its highest level in six months on Tuesday as investors increased bets that the Bank of Japan could raise interest rates next week, while gains in major South Korean semiconductor stocks supported Asian equities.
The yen rose as much as one per cent to 152.89 against the US dollar after gaining 1.2 per cent on Monday.
The currency’s rally has been supported by growing expectations of tighter Japanese monetary policy and recent intervention-related pressure from US Treasury Secretary Scott Bessent and Japanese Finance Minister Satsuki Katayama.
A stronger yen could reduce the cost of imports into Japan but may create pressure for Japanese exporters whose overseas earnings become less valuable when converted back into the local currency.
Chip Stocks Lift Asian Markets
Regional equities also advanced as semiconductor stocks attracted buyers.
The MSCI Asia Pacific Index gained about 0.3 per cent, supported strongly by South Korea’s two largest chipmakers, SK Hynix and Samsung Electronics.
South Korea’s Kospi Index climbed 2.4 per cent, while futures on the technology-heavy Nasdaq 100 rose 0.6 per cent.
Semiconductor shares have continued to benefit from strong demand linked to artificial intelligence and data-centre investment.
SK Hynix and Samsung are major producers of advanced memory chips used in AI systems, making them key beneficiaries of expanding global computing demand.
Oil Adds Inflation Pressure
Energy markets also remained in focus.
Brent crude gained about 0.5 per cent to $97.46 per barrel as traders monitored developments involving Iran and Oman over the management of shipping through the Strait of Hormuz.
Strong Chinese buying also contributed to tighter market conditions.
The rise in crude prices has raised concerns that inflationary pressures could persist for longer than investors previously expected.
Anastasia Amoroso, chief investment strategist at Partners Group, said global equities could enter a period of consolidation as higher energy prices increase pressure on central banks.
That creates a more complicated environment for markets.
Strong technology earnings and AI-related investment continue to support equities, but rising oil prices could force central banks to maintain higher interest rates for longer.
Investors will therefore be watching the Bank of Japan closely for its next monetary policy decision while also assessing how developments in the Middle East affect inflation and global risk appetite.
