Asian shares mostly advanced on Tuesday, with Japan’s benchmark Nikkei 225 briefly surpassing the 70,000 mark for the first time before paring gains after the Bank of Japan (BOJ) raised its key interest rate to 1%—the highest level in three decades [1]. By early afternoon, the Nikkei 225 was up 0.6% at 69,713.05 [1]. Other Asian markets also showed positive momentum: South Korea's Kospi gained 2.1% to reach a record 8,721.64, the Shanghai Composite edged up less than 0.1% to 4,100.53, Taiwan’s Taiex rose 0.6%, and India’s Sensex increased 0.5% [1]. However, Australia’s S&P/ASX 200 declined 0.3% to 8,892.10, and Hong Kong’s Hang Seng slipped 1.3% to 24,533.35 [1].
The BOJ’s quarter percentage point rate hike was a significant move, marking the highest benchmark rate in Japan in thirty years [1]. The market’s initial positive reaction, with the Nikkei topping 70,000, suggests investor optimism, though gains were later trimmed [1].
Global market sentiment was also buoyed by a tentative deal between the United States and Iran to resume crude oil flows, which led to a rally in worldwide stock markets on Monday [1]. The S&P 500 rose 1.7%, the Dow climbed 0.9% to a record, and the Nasdaq composite jumped 3.1% [1]. Brent crude fell 4.8% on expectations that the agreement might reopen the Strait of Hormuz, a key oil supply route for Asia, though analysts cautioned that uncertainties remain and negotiations are expected to continue over the next 60 days [1].
In the U.S., AI-related stocks surged, with Micron Technology up 10.8%, Advanced Micro Devices rising 7%, and Nvidia climbing 3.5%, the latter being the most valuable company on Wall Street and the largest driver of the S&P 500’s gains [1]. SpaceX, which owns the AI company xAI, rose 19.6% in its second day of trading [1]. In the bond market, Treasury yields eased, with the 10-year yield slipping to 4.47% from 4.48% late Friday, as lower oil prices reduced pressure on central banks to raise rates [1].
In currency trading, the U.S. dollar was nearly unchanged at 160.33 Japanese yen, and the euro was at $1.1580, down from $1.1592 [1].
CONCLUSION
The BOJ’s rate hike to 1%—its highest in thirty years—sparked initial optimism in Japanese equities, with the Nikkei briefly crossing 70,000 before trimming gains. Broader Asian and global markets responded positively to easing oil prices and progress on the U.S.-Iran crude deal, though some caution remains due to ongoing uncertainties. Overall, the market reaction was upbeat, especially in technology and AI-related stocks.