Asian stock markets broadly rise, with Japanese stocks reaching new highs under "high market trading," gold and silver decline, the US dollar stabilizes, and the RMB strengthens.

On Tuesday, February 10th, Asian stock markets continued their strength, with the Japanese stock market leading the way. Over the past weekend, Japanese Prime Minister Sanae Takaichi secured an election victory, which clearly boosted investor confidence and drove the benchmark Japanese stock index sharply higher.

The Nikkei 225 index broke through the 57,000-point level on Tuesday, rising as much as 2.52% intraday and hitting a new all-time high for the third consecutive day. Market analysts pointed out that investors are actively engaging in “Takaichi trading,” betting that her victory will lead to policy continuity favorable to the market. Meanwhile, the MSCI Asia Pacific (excluding Japan) index rose 0.4%, indicating overall regional market optimism.

The overnight performance of the US stock market also supported Asian markets. After stabilizing and rebounding from last week’s AI sell-off, the S&P 500 and Nasdaq indices increased by 0.5% and 0.9%, respectively. However, US stock futures during Tuesday’s Asian session showed some fatigue, with the S&P 500 E-mini futures slightly down 0.1%, indicating signs of short-term momentum exhaustion after the rebound.

Despite the bullish sentiment in equities, commodities and forex markets painted a different picture. After the US dollar index stabilized following a significant decline on Monday, gold and silver prices fell sharply, and oil prices also edged lower due to position adjustments. Investors are now increasingly focusing on the upcoming US retail sales, inflation, and employment data later this week to further assess the Federal Reserve’s policy path.

• The Nikkei 225 index extended its gains to 2%, reaching a new record high. The TOPIX also rose 1.08%, similarly hitting a new high.
• The KOSPI index in South Korea increased 1.21%, approaching its all-time closing high; the Australian S&P/ASX 200 rose 0.39%, potentially marking its third consecutive day of gains.
• Offshore RMB against the US dollar broke through 6.91 for the first time since May 2023, currently at 6.9094, up 57 points intraday.
• Spot gold fell 1% to $5,016.56 per ounce, while silver plunged 2.5% to $81.31 per ounce.
• Crude oil: WTI futures declined 0.1% to $64.15 per barrel.

“Takaichi Trading” Dominates Asian Markets

Japan’s strong market performance was the key theme during Tuesday’s Asian trading session. Takaichi’s overwhelming victory in the House of Representatives election eliminated political uncertainty and sparked a wave of buying. The Nikkei 225 not only broke through the 57,000-point mark, but the TOPIX also rose 1.08%, setting new records.

This optimism spread to other Asian markets as well. The KOSPI rose 1.21%, approaching its all-time closing high; the S&P/ASX 200 increased 0.39%, potentially achieving its third straight day of gains.

Kees Verbaas, Head of Global Basic Equities at Robeco, expressed a positive outlook on the overall economic situation. He said, “Although we see some cracks, overall we are quite optimistic about the economic outlook.” He noted that large companies are increasing rather than decreasing their investment plans, which is generally beneficial for economic activity, and emphasized that “many AI supply chains are only possible with emerging markets.”

Dollar Stabilizes, Renminbi Strengthens

In the forex market, the US dollar index remained near 96.97 on Tuesday, close to this month’s lows. On Monday, the dollar index experienced its largest single-day decline in two weeks, mainly influenced by a Bloomberg report.

In response, analysts at Alpine Macro stated in a research report: “Raising the global status of the RMB is being prioritized on the policy agenda.”

In the morning, offshore RMB against the US dollar broke through 6.91 for the first time since May 2023, currently at 6.9094, up 57 points intraday.

Commodities Retreat: Gold and Silver Drop, Oil Slightly Lower

After two consecutive days of gains, precious metals prices pulled back on Tuesday.

Spot gold briefly fell 1% to $5,016.56 per ounce, and silver plunged 2.5% to $81.31 per ounce. Previously, driven by a softening dollar, gold hit a record high of $5,594.82 on January 29. The decline has now narrowed.

In oil markets, WTI crude futures declined 0.1% to $64.15 per barrel.

Analysts believe the price drop is mainly due to position adjustments, but tensions between the US and Iran could limit further declines. The US Department of Transportation issued maritime advisories recommending US ships stay away from Iranian waters, citing recent attempts by Iranian forces to force commercial ships into their waters.

Market pricing currently indicates the Federal Reserve will keep interest rates unchanged until June. CME Group’s FedWatch tool shows only a 17.7% chance of a 25 basis point rate cut at the March 18 meeting. White House economic advisor Kevin Hassett stated on Monday that, due to the slowdown in labor growth caused by the Trump administration’s immigration policies and increased productivity from new AI tools, US employment growth may decrease in the coming months. This statement has added more attention to upcoming employment data.

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