Asia Stocks Edge Up to Record, Yen Trades Near 160: Markets Wrap

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(Bloomberg) — Asian stocks followed Wall Street higher as renewed enthusiasm for the artificial-intelligence trade drove US equities to records. The yen hovered near 160 per dollar.

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The MSCI Asia Pacific Index climbed 0.3% to an all-time high, with stocks in Japan and Australia rising as South Korea was shut for a holiday. The Asian gauge was poised for a ninth advance in 10 days. Earlier, the S&P 500 Index closed at a record high after notching its longest winning streak since May as a gauge of chipmakers surged nearly 6%.

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A touch of caution crept into markets as Brent crude rose almost 1% to $97 a barrel following reports of missile strikes in the Middle East.

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The dollar was slightly stronger against most of its Group-of-10 peers. Bitcoin slid to around $66,900. Treasuries edged lower with the yield on the 10-year bond rising two basis points to 4.46% as the first of three labor-market reports this week backed wagers that the Federal Reserve’s next move will be to raise interest rates. 

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Investors piling into AI-linked stocks have propelled global equities to record highs, with hopes for a deal to end the war that has rattled markets worldwide providing an additional boost. Traders have looked past concerns about elevated valuations, betting that strong earnings growth and easing geopolitical tensions will continue to support risk assets.

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“Tech continues to dominate the market,” said veteran strategist Louis Navellier. “The trend remains positive, with the catalyst for further material gains possible with a resolution with Iran.”

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What Bloomberg Strategists Say…

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“While further exchanges in Iran initially dented risk appetite and lifted WTI toward $96 a barrel in early Asia trading, crude has since pared some of those gains, providing a timely boost to market sentiment at the opening bell.”

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— David Savage, Macro Squawk. For more on the analysis, click here.

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Focus in Asia is on the yen as traders awaited Bank of Japan Governor Kazuo Ueda’s planned speech for clues on the outlook for interest rates. Yen traders face a heightened risk of intervention over the next two weeks after Japan’s currency defied historic attempts to prop it up.

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Elsewhere, Cliffwater LLC’s flagship private credit fund capped redemptions at 5% in the second quarter after investors looked to pull about 17% of shares, in a sign of enduring pressure on the $1.8 trillion market.

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Meanwhile, President Donald Trump remained optimistic the US can reach an interim peace deal soon. He disputed reports in Iranian state media that said talks with Washington had been suspended over the fighting in Lebanon, saying the two sides have been “continuously” having conversations, including “today.”

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Tensions remained high in the region as US forces defeated multiple Iranian ballistic missiles and drones, and conducted self-defense strikes on Qeshm Island in response to attempted attacks by Iran.