Asian Shares Hit Record, Yen Falls to 2024 Levels: Markets Wrap
(Bloomberg) — The rally in stocks extended into Asia, where cheaper valuations and higher growth prospects drew investors broadening their focus beyond US markets.
The MSCI All Country World Index, one of the broadest measures of the equity market, climbed 0.1% to an all-time high as Asian shares rose to a record. Equity-index futures indicated that the rally may extend into Europe, while contracts showed a weaker start for US stocks after the S&P 500 closed at a record on Monday.
Amid the buoyant mood in stocks, Treasuries edged lower with the yield on the benchmark 10-year rising more than one basis point to 4.19%. Gold and silver pared earlier losses as Citigroup Inc. issued a bullish outlook for them. Brent crude touched its highest level since November after President Donald Trump’s comments on imposing tariffs on countries doing business with Iran.
Much of the action was in Japan, where stocks jumped and government bond yields surged on speculation that Prime Minister Sanae Takaichi might call a snap election. The yen dropped to its weakest level against the dollar since July 2024. Defense and nuclear stocks rose in the so-called “Takaichi trade,” which has helped fuel equity gains, bond losses and a weak currency.
The rally in global stocks faces key risks this week from US inflation data and a possible Supreme Court ruling on Trump’s tariffs. The momentum in stocks also suggested investors are looking beyond the US, where renewed attacks by the Trump administration on the Federal Reserve have raised concerns over central-bank independence.
Global investors have become “more open to geographically diversifying their equity exposure, and has been presented with some new reasons to potentially do so as the new year has gotten underway,” wrote Lori Calvasina, US equity strategist at RBC Capital Markets LLC, in a note.
Even after rallying for three consecutive years, Asian shares are still cheaper compared with US benchmarks. The MSCI Asia Pacific Index trades at about 15 times earnings, compared with about 22 times for the S&P 500 and 25 times for the Nasdaq 100, according to data compiled by Bloomberg.
What Bloomberg strategists say…
Asian stocks are extending their recent strong run, with an additional tailwind from investor unease about the Powell-DOJ saga which hangs over US markets. Investors looking for an AI narrative have plenty of choice in Asia with Chinese, Korean, Japanese and Taiwanese companies all in the forefront of developments.
— Mark Cranfield, MLIV strategist. For full analysis, click here.
The latest salvo between the Trump administration and the Fed comes as investors navigate a chaotic backdrop.
The president has taken aim at credit card companies, homebuilders and defense contractors — while also considering a US role in the Iranian protests after capturing Venezuela’s leader earlier in January.
“After shrugging off last week’s geopolitical surprises, US markets face domestic political headlines,” said Chris Larkin at E*Trade from Morgan Stanley. “Barring additional surprises, the markets will likely turn their attention to earnings and inflation data.”
The US core consumer price index, regarded as a measure of underlying inflation because it strips out volatile food and energy costs, is seen rising 2.7% in December from a year earlier.
Fourth-quarter US earnings, meanwhile, kick off in earnest later this week and are expected to show healthy performance, according to Michael Casper and Wendy Soong at Bloomberg Intelligence.
Investors in Asia were focused on the developments in Japan. The yen underperformed its Group-of-10 peers amid speculation a snap election would lead to higher fiscal outlay and faster inflation.
The currency extended its losses and fell as much as 0.5% to 158.91 per dollar on Tuesday, surpassing the previous low of 158.87 in January 2025. Local media reported Takaichi, who has sought to mitigate the impact of rising costs of living with a stimulus package, may call for a vote.
“The return of political risk weighs on the yen, though intervention risk limits the appeal” of buying the dollar against the Japanese currency at current levels, wrote Moh Siong Sim and Christopher Wong, FX strategists at Oversea-Chinese Banking Corp. in Singapore.
Corporate News:
Citigroup Inc. is set to cut about 1,000 jobs this week as part of Chief Executive Jane Fraser’s march to keep a lid on costs and improve returns at the Wall Street bank. BlackRock Inc. is cutting hundreds of jobs across the company, becoming the latest Wall Street firm to rein in headcount in recent weeks. Tata Consultancy Services Ltd.’s quarterly earnings missed analysts’ estimates, as corporations continue to limit spending on information technology projects. SK Hynix Inc. plans to spend 19 trillion won ($12.9 billion) building a new advanced chip packaging facility. GigaDevice Semiconductor Inc. shares rose as much as 54% in its Hong Kong debut. Some of the main moves in markets:
Stocks
S&P 500 futures fell 0.1% as of 2:41 p.m. Tokyo time Japan’s Topix rose 2.5% Hong Kong’s Hang Seng rose 0.8% The Shanghai Composite fell 0.4% Euro Stoxx 50 futures rose 0.3% Currencies
The Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1665 The Japanese yen fell 0.4% to 158.78 per dollar The offshore yuan was little changed at 6.9719 per dollar Cryptocurrencies
Bitcoin rose 0.9% to $91,774.31 Ether rose 1.3% to $3,131.09 Bonds
The yield on 10-year Treasuries advanced one basis point to 4.19% Japan’s 10-year yield advanced six basis points to 2.150% Australia’s 10-year yield was little changed at 4.71% Commodities
West Texas Intermediate crude rose 0.3% to $59.69 a barrel Spot gold fell 0.2% to $4,590.17 an ounce This story was produced with the assistance of Bloomberg Automation.
–With assistance from Mark Cranfield, Abhishek Vishnoi and Masaki Kondo.
©2026 Bloomberg L.P.
