- In a monetary policy meeting held on Tuesday, the Bank of Japan voted 7 to 1 to raise the benchmark policy rate to a historic high of 1%, the highest level since 1995. This decision, amid reduced uncertainty, led the Nikkei 225 index to historically surpass the 70,000-point mark during trading.
- The initial optimism from a preliminary geopolitical peace agreement between Washington and Tehran has slightly cooled. Market confidence in the swift and full reopening of the Strait of Hormuz remains cautious, with Brent crude futures slightly dipping and pressured below $83 per barrel.
- Due to mismatched regional economic data, major Asia-Pacific stock indices showed divergence. The Korea Composite Stock Price Index surged over 2% driven by external positives, while weaker-than-expected Chinese retail and investment data weighed on the Hang Seng Index, causing it to fall during trading.
Bank of Japan Advances Policy Normalization, Nikkei Index Hits Record High
In today's concluded monetary policy meeting, the Bank of Japan (BOJ) advanced its monetary policy normalization process as expected. The rate hike was fully in line with market expectations, resulting in a stable overall financial market performance. Following the announcement, the yen slightly appreciated against the dollar in the international forex market to around 160.215. With the policy decision settled, bullish sentiment in the Japanese stock market was significantly boosted, with the Nikkei 225 index (NI225) rising 0.9% during trading, successfully surpassing the 70,000-point mark for the first time in history. Due to the illness of BOJ Governor Kazuo Ueda, the subsequent press conference was hosted by Deputy Governor Shinichi Uchida. Market analysis institutions generally expect Uchida's arguments to be primarily based on Ueda's previous public statements, with no substantial change in the BOJ's assessment of the domestic economic fundamentals in the short term.
Geopolitical Optimism Weakens, Global Oil Prices Under Pressure Amid Volatility
On the global energy and geopolitical front, the positive sentiment triggered by a preliminary agreement between Washington and Tehran is marginally fading. Although U.S. stocks and bonds rose in overnight trading due to eased geopolitical tensions, with the S&P 500 index (SPX) and Nasdaq Composite Index (IXIC) gaining 1.7% and 3.1% respectively, the market attitude during the Asia-Pacific trading session was evidently more rational and cautious. Divergent stances between Washington and Israel on core issues like Iran's nuclear program have raised some doubts about the long-term sustainability of this diplomatic breakthrough. As a result, Brent crude futures (BRN1!) fell 0.3% to $82.90 per barrel. Several Asian and European shipping companies have publicly stated that restoring confidence in resuming transit through the Strait of Hormuz may still take several weeks, with the process of geopolitical premium dissipation likely to be more repetitive.
Mismatch in Macroeconomic Data Causes Divergence in Major Asia-Pacific Stock Indices
Amid a complex overall macroeconomic environment, major Asian equity markets are influenced by a mix of domestic economic indicators and external sentiment. The Korea Composite Stock Price Index (KOSPI) performed strongly, rising 2.3% during trading, boosted by the overnight rise in U.S. stocks. In stark contrast, China's recently released key macroeconomic indicators, such as retail sales and fixed asset investment, fell short of market expectations, directly exerting downward pressure on the Hang Seng Index (HSI), which retraced previous gains and recorded a 1.48% decline during trading. Meanwhile, the market is also closely monitoring the policy moves of other major regional central banks, with the Reserve Bank of Australia (RBA) expected to announce its interest rate decision later today, with the market currently widely anticipating it to maintain the current policy rate.
Global Cross-Asset Narrow Fluctuations, High-Risk Cryptocurrencies Broadly Retreat
In the forex, bond, and commodity markets, the U.S. Dollar Index (DXY) is maintaining narrow fluctuations around 99.70, essentially trapped within the trading range of the past three days. The yield on the U.S. 10-year Treasury note slightly rose by 0.4 basis points to 4.471%. As demand for safe-haven funds and asset allocation rises in a volatile market, spot gold (GOLD) increased by 0.4%, reaching $4,321.22 per ounce. In contrast, high-risk assets, due to previously high valuations, experienced varying degrees of valuation pullbacks during trading. Bitcoin (BTCUSD) fell 0.8% to $65,938.29, while Ether (ETHUSD) showed weaker performance, retreating 2.1% to $1,777.02. If core inflation data rebounds or the Middle East situation changes again, the pricing logic of global assets may face a comprehensive reassessment.
