Asian Markets Rally as Yen Holds Ground Following Market Intervention

The regional recovery follows a buoyant session on Wall Street, where robust earnings from Microsoft and Amazon helped alleviate investor anxiety regarding high capital expenditure in the artificial intelligence sector. Japan’s Nikkei advanced 4.5%, while MSCI’s broadest index of Asia-Pacific shares outside Japan climbed 4.6%. Despite the optimism, South Korea’s benchmark index remains on track for its worst monthly performance since 1997, having shed more than 25% in July amid volatility that forced local authorities to curb leveraged trading products.

Currency markets remain under intense scrutiny following suspected coordinated intervention by Japanese and South Korean authorities to stabilize their respective currencies. The yen traded at 160.55 per dollar, holding steady after a 2.4% spike on Thursday. Vishnu Varathan, head of APAC macro strategy at Mizuho, noted that the timing of the intervention appears designed to preempt a further selloff during the Bank of Japan’s policy meeting. While equity markets stabilized, geopolitical tensions in the Middle East exerted pressure on commodities; Brent crude futures slipped to $88.00 per barrel following a drone strike near Egypt’s Damietta port, even as broader energy markets avoided a panic-driven spike.