The Japan Times - Stocks climb, yen stays near 40-year low against dollar

With investors more optimistic about an eventual end to the US-Iran war, the focus has returned to monetary policy and the surge in artificial intelligence investment.

"The second quarter is ending on a high" for stocks, said Kathleen Brooks, research director at XTB trading group.

The last three months have "been dominated by stunning gains for chip stocks and tech-heavy indices, a strengthening dollar that has sent the yen down to a 40-year low and shifting geopolitical risks that are playing out in commodity markets", she added.

Oil prices dipped Tuesday, having returned last week to the levels seen before the US and Israeli strikes on Iran sparked a Mideast war and shut down traffic in the Gulf.

That also handed a boost to global stock markets shaken by inflationary pressures.

European stock saw solid gains on the last trading day of the quarter, with London and Frankfurt above one percent in midday deals.

After a shaky start, Asian investors pushed tech companies higher Tuesday, and the tech-heavy Nasdaq climbed more than two percent Monday on Wall Street.

Seoul's Kospi index rose one percent but was still well down from its recent record high touched before last week's rout.

In Tokyo, the focus was also on the yen amid speculation that Japan's government could intervene in currency markets to push it higher against the dollar.

The yen fell as low as 162.40 per dollar amid expectations the US Federal Reserve would lift interest rates this year.

The yen's moves came ahead of US jobs data Thursday, with analysts warning that a stronger-than-expected reading could fan bets on a Fed rate hike sooner rather than later.

An increase in borrowing costs to a 31-year high by the Bank of Japan this month did little to support the yen, with government officials' warnings of an intervention also falling short.

Finance Minister Satsuki Katayama was reported by local media as saying Tuesday that Tokyo "will take appropriate action at any time as necessary".

"A major catalyst behind the dollar's move has been the arrival of new Federal Reserve chair Kevin Warsh, whose public comments have been interpreted as notably more hawkish" than US President Donald Trump might have wished, said Axel Rudolph, an analyst at IG.

"Warsh has repeatedly stressed the importance of maintaining the Fed's inflation-fighting credibility and has signalled a willingness to keep policy restrictive if price pressures prove persistent," he said.

Rudolph added that "the prospect of higher US interest rates has widened the expected policy gap between the United States and many of its major trading partners, increasing demand for dollar-denominated assets".

- Key figures around 1045 GMT -

London - FTSE 100: UP 1.1 percent at 10,603.91 points

Paris - CAC 40: UP 0.6 percent at 8,414.11

Frankfurt - DAX: UP 1.4 percent at 24,967.22

Tokyo - Nikkei 225: UP 0.9 percent at 70,062.32 (close)

Hong Kong - Hang Seng Index: DOWN 0.6 percent at 22,881.02 (close)

Shanghai - Composite: UP 0.5 percent at 4,094.40 (close)

New York - Dow: UP 0.6 percent at 52,182.74 (close)

Dollar/yen: UP at 162.35 yen from 161.92 yen on Monday

Euro/dollar: DOWN at $1.1399 from $1.1430

Pound/dollar: DOWN at $1.3233 from $1.3261

Euro/pound: DOWN at 86.14 pence from 86.17 pence

Brent North Sea Crude: DOWN 0.1 percent at $73.81 a barrel

West Texas Intermediate: DOWN 0.2 percent at $70.58 a barrel

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T.Sato--JT