The surge in artificial intelligence has once again propelled Asia-Pacific stock markets to historic peaks.
Markets across the Asia-Pacific region advanced broadly on Wednesday. Japan's Nikkei 225 index soared over 2.5% during the session, reaching 68,452 points to set a new all-time record. The MSCI Asia Pacific Index also climbed to a record high, gaining 0.8%. Australia's ASX 200 rose 0.62%. The South Korean market was closed for a public holiday. The core driver of this rally remains AI.
Following the previous day's close on Wall Street, where both the S&P 500 and Nasdaq 100 indices hit record highs and the Philadelphia Semiconductor Index surged nearly 6%, this tech enthusiasm spilled over to Asia overnight. Japan's leading chip equipment maker, Tokyo Electron, jumped 10% in a single day. Taiwan's TAIEX index rose 1.7% to a new record, with Taiwan Semiconductor Manufacturing (NYSE: TSM) shares also reaching a peak.
A senior strategist commented, "Technology stocks continue to dominate the market, and the trend remains positive. If the Iran situation can be resolved, the market has a catalyst for further significant gains."
Key Market Movements
The Nikkei 225 reached a historic high, gaining over 2.5% to 68,452 points; the MSCI Asia Pacific Index also refreshed its record, with AI and tech stocks as the core drivers.
Geopolitical tensions in the Strait of Hormuz escalated: The U.S. Secretary of State stated Iran has laid extensive mines in the strait, pushing Brent crude to $97 per barrel, though overall market sentiment was not crushed.
The South Korean market was closed for a holiday. Australia's ASX 200 rose 0.62%.
The Japanese yen hovered around the 160 level, with the market awaiting remarks from Bank of Japan Governor Kazuo Ueda; intervention risks made short-sellers cautious.
U.S. stocks saw the S&P 500 and Nasdaq 100 both hit record highs the previous day, with the Philadelphia Semiconductor Index rising nearly 6%.
Gold dipped slightly by 0.3% to $4,475 per ounce. Bitcoin fell about 1.2% to $66,703, hovering near a two-month low, while Ethereum hit a three-month low.
Strait of Hormuz Mining Pushes Oil Near $100
Market sentiment was not without its cracks.
In a stern testimony before the Senate Foreign Relations Committee on Tuesday, the U.S. Secretary of State stated, "They are firing on commercial ships and laying extensive mines in the Strait of Hormuz—that's international waters." This was his first congressional hearing since the outbreak of the Iran conflict earlier this year.
A White House official subsequently told CNBC that the Pentagon had destroyed a significant number of mines and over 40 minelaying vessels.
The Strait of Hormuz is a critical chokepoint for global energy transport—prior to the conflict, roughly one-fifth of the world's oil and liquefied natural gas passed through it. Currently, visible commercial vessel traffic through the waterway remains limited.
Oil prices moved higher in response. Brent crude futures rose about 1% to $97 per barrel, while WTI crude gained about 1.2% to $94.86 per barrel.
However, according to commentary from a Bloomberg macro strategist, "The Iran situation initially dampened risk appetite and pushed WTI toward $96, but prices subsequently retreated, providing timely sentiment support for the Asian open."
Meanwhile, former President Trump expressed optimism about negotiation prospects. He denied reports from Iranian state media that talks had been suspended, stating the two countries were in "continuous" communication, including "today."
Yen Stalls at 160, Market Awaits Ueda
The yen exchange rate hovered around 159.87, approaching the key psychological level of 160.
Traders were cautious about a break above 160 due to the potential for authorities to intervene at any time to support the currency. The market is awaiting a scheduled speech from Bank of Japan Governor Kazuo Ueda for clues on the interest rate outlook.
In bond markets, the yield on the U.S. 10-year Treasury note edged up 1 basis point to 4.45%. A jump in U.S. job openings in April to a near two-year high and a decline in layoffs further signaled labor market resilience, reinforcing market bets that the Federal Reserve's next move could be a rate hike.
An analyst from eToro noted, "The jobs market continues to hold its ground. The market hopes that energy prices will retreat after the Q1 geopolitical shock, allowing the Fed to stand pat while inflation cools in the second half. Combined with upward revisions to earnings estimates, these factors together could propel stock prices higher."
Gold and Bitcoin Decline
Gold dipped 0.3% to $4,475 per ounce, as inflation concerns fuel expectations that borrowing costs will remain elevated.
Bitcoin fell about 1.2% to $66,703, lingering near a two-month low, while Ethereum hit a three-month low.
Analysis suggests that outflows from ETFs and strategic reductions are merely symptoms. The fundamental reason is that global capital now has more choices: those worried about inflation buy gold and energy, those seeking growth buy AI, and even investors looking to gain exposure to crypto don't necessarily have to buy Bitcoin. The bearish logic for Bitcoin has changed—"scarcity is no longer enough."
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