Nikkei surges on chips; Iran escalation sends WTI above $74
As of 2026-07-09 12:00 SGT
Key points
- Japan's Nikkei 225 surged as much as 1,600 points intraday, with the mid-session close registering a 1,361-point gain at 68,180; Advantest alone contributed approximately 492 index points as AI and semiconductor names led the recovery
- The Iran-U.S. ceasefire effectively collapsed: President Trump declared it "over," with U.S. Central Command confirming strikes on approximately 90 Iranian military targets including air defense systems, missile and drone storage sites, and naval infrastructure; Iran's IRGC subsequently attacked U.S. bases in Kuwait and Bahrain
- June FOMC minutes — the first under Chair Kevin Warsh — showed Fed officials split on the rate outlook, with "a few" members having argued for a rate hike at that meeting, citing persistent inflation risks from Middle East energy shocks and AI investment demand
- China's June CPI slowed to +1.0% y/y, below the +1.2% forecast, while PPI accelerated to +4.1% y/y, a near four-year high, underscoring cost-push pressures against a backdrop of weak domestic demand
- Japan's 10-year JGB yield climbed to 2.885%, its highest level since November 1996, as overseas rate-hike expectations and Middle East risk premium spilled into the domestic bond market
Market snapshot
| Instrument | Level | Change |
|---|---|---|
| USD/JPY | 162.44 | -0.07% |
| EUR/USD | 1.1430 | +0.07% |
| Nikkei 225 (intraday) | 68,029 | +1.81% |
| Hang Seng (intraday) | 24,024 | -0.72% |
| Dow futures | 52,689 | +0.12% |
| S&P 500 futures | 7,539.00 | +0.14% |
| Nasdaq 100 futures | 29,512 | +0.15% |
| Gold futures | 4,071.30 | -0.27% |
| WTI crude | 74.37 | +1.16% |
| Bitcoin | 61,957 | -0.44% |
| US 10-yr yield | 4.569% | +4.0bp |
Foreign exchange — USD/JPY range-bound at 162.44 as intervention watch caps upside
USD/JPY is little changed at 162.44 (-0.07%), holding within the prior session's 162.36–162.61 range. June FOMC minutes confirmed a hawkish minority — "a few" officials favored a rate hike — which supported the 2-year US-Japan rate differential, yet a meaningful narrowing in the 10-year spread (U.S. Treasuries at 4.569% vs. JGBs at 2.885%, a 30-year high) offset some upward pressure on the pair. The market is also alert to intervention risk; with USD/JPY near the highest level in roughly 40 years for the yen, Tokyo's tolerance for further yen depreciation appears limited. EUR/USD edged to 1.1430 (+0.07%), trading marginally higher within a tight 1.1419–1.1434 band. Through the rest of the Asia session, USD/JPY is likely to remain pinned near 162.44; tonight's U.S. initial jobless claims (forecast 218K) could be the catalyst to test 163 or to consolidate lower if the print comes in soft.
Equities — Nikkei surges on chips; Hang Seng eases under geopolitical pressure
Japan's Nikkei 225 surged as much as 1,600 points intraday, closing the morning session up 1,361 points at 68,180. AI and semiconductor names drove the rally: Advantest contributed approximately 492 index points on reports the U.S. government will permit China to purchase NVIDIA products. Kioxia jumped as much as 11.2% after Bain Capital was reported to be selling its full stake. The Growth 250 index also rebounded, with iSpace hitting its limit-up bid. The Hang Seng (24,024, -0.72%) is under modest pressure as geopolitical risk from the Iran conflict offsets strong gains in tech; Alibaba continued to rally while consumer names lagged. A-share markets closed the morning session with the Shanghai Composite down 0.46% and the Shenzhen Component down 0.35%, though the STAR 50 outperformed sharply at +3.19%, driven by domestic AI and chip names including MCHP-related stocks. By the time European markets open, the Nikkei's ability to hold its gains will hinge on whether U.S. futures maintain their modest positive bias and Iran tensions refrain from a fresh escalation.
Macro — FOMC minutes flag hawkish minority; China inflation diverges
The June FOMC minutes, under Kevin Warsh's first meeting as Chair, revealed a more divided Fed than markets had anticipated. "A few" officials argued for raising rates at that meeting, citing inflation elevated by Middle East energy pressures and AI investment demand; the majority held steady but signaled readiness to act if inflation persists. China's June price data diverged: CPI cooled to +1.0% y/y (below the +1.2% prior and consensus), reflecting subdued consumer demand, while PPI rose to +4.1% y/y, a near four-year high driven by energy and metals costs. Tonight's U.S. initial jobless claims (forecast 218K) will be the next key reading on whether conditions remain tight enough to support the hawkish minority's case.
Commodities — WTI pushes above prior session high; gold softens below prior low
WTI crude rose to $74.37 (+1.16%), trading above the prior session's high of $72.51 as Iran supply disruption fears intensified following the collapse of the ceasefire. U.S. forces struck approximately 90 Iranian military targets; Iran's IRGC hit U.S. bases in Kuwait and Bahrain and warned of wider retaliation. Kalshi-based market estimates flagged that Strait of Hormuz traffic may not normalize until 2027. Russia simultaneously banned diesel exports through 31 July, adding a second front of energy supply constraint. Gold futures eased to $4,071.30 (-0.27%), trading below even the prior session's low of $4,107.20. A firmer dollar and the "sticky inflation equals higher-for-longer Fed" narrative limited the geopolitical haven bid, keeping gold under pressure despite the elevated Middle East risk. Through the rest of the Asia session, oil is likely to hold near $74 as traders assess whether any Iran-U.S. dialogue re-emerges.
Geopolitics — Iran-U.S. ceasefire collapses; Hormuz supply risk escalates
The three-week-old ceasefire has effectively ended. President Trump declared it "over" and used sharp language toward Iranian leaders. U.S. Central Command confirmed striking approximately 90 Iranian military targets — the fourth action since the June memorandum of understanding — including air defense systems, missile and drone storage sites, and naval infrastructure. Iran's IRGC responded with missile and drone strikes on U.S. bases in Kuwait and Bahrain, warning further U.S. action would expand the target set across the region. At the NATO Istanbul summit, Trump focused predominantly on Iran while European allies expressed growing concern. Hormuz shipping disruption is weighing on airline and shipping stocks globally.
Upcoming events
| Time (SGT) | Region | Event | Impact |
|---|---|---|---|
| 07/09 20:30 | US | Unemployment Claims (forecast 218K) | Medium |
| 07/10 20:30 | CA | Employment Change (forecast 11.2K) | High |
| 07/10 20:30 | CA | Unemployment Rate (forecast 6.6%) | High |