Japan’s stock surge after interest rate rumors

03 October 2024

Paul Reid

Financial Journalist at Exness

Share

With global markets reacting to interest rate policies and geopolitical tensions, now is the time for traders to act. Here's how you can position yourself to take advantage of these movements.

Japanese stocks jumped while Hong Kong and European markets declined, as tensions in the Middle East escalated with Israel’s incursion into Lebanon. Meanwhile, China’s markets remained closed due to the Golden Week holidays.

Market movements

S&P 500 futures dropped by 0.44% to 5,735.00, while the S&P 500 gained 0.01%, reaching 5,709.54. The Nasdaq Composite rose 0.08% to 17,925.12, and the Dow Jones Industrial Average added 0.09%, closing at 42,196.52. In Europe, the STOXX Europe 600 fell by 0.86%, and Hong Kong’s Hang Seng Index declined 1.47%. Bitcoin fell 0.37%, landing at $60,409.90 (USD).

Hong Kong: Stocks fade after a strong rally

Hong Kong shares pulled back after a 6.2% boost the previous day, with traders taking profits after a three-week rise of about 30%. Property stocks led the decline, with the Hang Seng Mainland Properties Index dropping nearly 6%, as the momentum from China’s stimulus measures began to slow.

Japan: Yen weakens, boosting export manufacturers

The Nikkei 225 surged by 1.97%, recovering after a 2.18% drop the day before. Prime Minister Shigeru Ishiba, after a meeting with Bank of Japan Governor Kazuo Ueda, downplayed the likelihood of imminent interest rate hikes. This weakened the yen, benefiting Japan’s export manufacturers by making their products more competitive on the global market.

Europe: Stocks hit by Middle East tensions

European markets were broadly lower, with the STOXX Europe 600 declining by 0.86%. The UK’s FTSE 100 saw a slight gain of 0.15%. The travel sector was hit hardest, dropping more than 1.1%, as tensions in the Middle East disrupted flights. Oil and gas prices remained stable due to the possibility of rising energy costs. Meanwhile, the British pound fell by over 1% against the US dollar after the Bank of England’s governor suggested potential interest rate cuts.

US premarket: Oil and Levi Strauss drag markets

US indexes dropped in premarket trading as investors reacted to developments in the Middle East and a revenue outlook cut by Levi Strauss. Shares of Levi Strauss fell nearly 11%. Investors are awaiting key reports, including Constellation Brands’ quarterly results and the US weekly jobless numbers, as well as the upcoming jobs report, which will heavily influence future interest rate decisions.

Dow, Nasdaq, and S&P 500 make slight gains

On Wednesday, the Dow gained 0.09%, the S&P 500 inched up by 0.01%, and the Nasdaq rose by 0.08%. This came after an ADP report showed that private-sector hiring increased by 143,000 jobs, providing optimism ahead of the official jobs report. Nvidia gained 1.85%, while Nike dropped by 6.77% after withdrawing its financial guidance.

Conclusion

For traders, the recent market shifts present a wide range of opportunities. With Japan’s stock surge and a weakened yen benefiting exporters, keeping an eye on global markets is crucial. Monitoring geopolitical tensions, economic data, and corporate earnings reports will help you stay informed and adjust your trading strategy accordingly. Diversification, timely reactions, and understanding market sentiment will be key to navigating the current volatility.

Explore Exness assets and markets

Practice trading with our various assets from leading global financial markets with the same conditions as on live trading accounts.

Try free demo

Related

Exness Trade app

Trade with confidence 
anytime, anywhere.

Trading is risky. T&Cs apply.