Asia Markets Rally as Yen Surges, Iran Risk Cools, Chips Lead
Asian stocks climbed Friday as chip stocks rebounded, the yen jumped on pension-flow news, and Iran-US tensions stayed calm.
Asia had a clean sweep Friday and there were three things driving it: chips, the yen, and Iran doing nothing. When geopolitical risk fades and semis catch a bid at the same time, markets run. That's exactly what happened across the region overnight.
The yen was the sharpest mover in FX. Finance Minister Katayama's comments about pushing GPIF and other pension funds into domestic assets lit a fire under the currency — and it kept burning. Japan's producer prices for June came in at +7.1% year-over-year, well above the 6.8% estimate and the prior 6.3% reading. That's the fastest pace since 2023. The BOJ's rate-hike case just got stronger. You want yen exposure, you have a fundamental reason now.
Read more Beaten-Down ETFs Could Outperform AI Stocks in Six Months →
On oil, Citi is holding its $75 Brent base case for Q3. The thesis: a US-Iran nuclear deal gets done, the Strait of Hormuz stays open, and there's no supply shock. Crude traded flat Friday with zero fresh escalation after this week's earlier scare. The risk premium that briefly spiked is getting priced back out. Traders chasing an oil breakout are getting punished.
South Korea flagged the won as still misaligned but expects relief in the second half of the year. The PBOC set its USD/CNY reference rate at 6.7989 versus the 6.7931 estimate — a slight yuan-weak nudge but nothing dramatic. Meanwhile, sovereign wealth funds are pivoting hard toward national priorities, with AI spending reportedly hitting $404 billion. OpenAI faces its own drama with COO Simo stepping down permanently, complicating IPO plans.
Back in the US, major indices closed higher Friday led by Nasdaq. The setup heading into next week: yen strength and hot Japanese PPI are the trades to watch. Continue reading at Forexlive.
