- The US dollar index rose to a 13-month high of 101.46. The strong dollar broadly suppressed non-US currencies and commodities, with spot gold plunging to a two-week low of $4,050.
- The summary of the Bank of Japan's policy opinions hinted at rising inflation risks, with the yen under pressure against the dollar at 161.53. Market vigilance regarding potential intervention by Japanese authorities has significantly increased.
- Memory chip giant Micron Technology will release its earnings report after the market closes on Wednesday. Against the backdrop of recent valuation adjustments in the AI and semiconductor sectors, this report will be a key indicator for verifying AI demand and guiding market direction.
Strong Dollar Suppresses Global Assets
The Federal Reserve's relatively tight monetary policy expectations continue to support the forex market, with the dollar index maintaining its strength, rising slightly by 0.07% to 101.46, reaching a 13-month high. As a result, the euro fell 0.15% against the dollar to 1.1364, and the pound weakened to 1.3192. The commodities market also came under significant pressure, with spot gold falling 1.1% during the session, reaching a two-week low of $4,050.00. Market analysis indicates that the appeal of non-yielding assets has recently diminished amid expectations of a persistently strong dollar and prolonged high interest rates.
Yen Under Pressure as Intervention Alert Escalates
The strengthening dollar has once again put the yen under depreciation pressure, with the yen-dollar exchange rate fluctuating near the low of 161.53. This level has led traders to speculate that Japan's Ministry of Finance might intervene in the forex market at any time. The summary of the Bank of Japan's June monetary policy meeting, released on the same day, showed increased concern among policymakers about rising inflation risks. In the previous meeting, the Bank of Japan had raised the key interest rate to a 31-year high of 1.00%, with several members advocating for a faster rate hike path in the future to quickly bring borrowing costs to a neutral level.
International Oil Prices Hit Stage Lows
Recent geopolitical developments have pressured the supply side of the energy market. International crude oil prices fell again by more than 1% during the Asian session on Wednesday, trading near a four-month low. Multiple signs indicate that some tankers previously stranded in the Gulf region are preparing to exit the Strait of Hormuz. However, significant differences remain between the US and Iran regarding the details of a bilateral peace agreement, particularly on core terms such as verification and control of the Strait of Hormuz, adding uncertainty to the stability of the subsequent energy supply chain.
Semiconductor Sector Awaits Micron Earnings
Global stock markets showed mixed performance on Wednesday, with the MSCI Asia Pacific Index (excluding Japan) slightly up by 0.4%, while Japan's Nikkei Index fell by 0.4%. The market's sensitivity to valuations in the technology and AI supply chain is at a high level. Memory chip giant Micron Technology (MU:US) is set to release its latest earnings report after the market closes today. As one of the core drivers of this year's tech stock rally, the semiconductor and AI sectors have recently experienced significant volatility. The market generally believes that Micron's performance and forward guidance will be a litmus test for whether the industry's fundamentals remain solid.
