Japan Leads Asian Markets Surge: What Investors Need to Know After Strong JGB Sale
SINGAPORE – Japanese stocks led gains across Asian markets on Thursday, driven by strong demand in a government bond auction, while the US dollar rebounded from a five-week low.
The Nikkei 225 climbed 2.2%, buoyed by an impressive 12% surge in industrial robot manufacturer Fanuc Corp. Meanwhile, MSCI’s broad index of Asia-Pacific shares excluding Japan remained flat, weighed down by losses in South Korea and New Zealand.
In early European trading, futures were broadly higher, with pan-region futures up 0.6%, German DAX futures rising 0.6%, and FTSE futures gaining 0.31%.
Tokyo’s latest debt sale drew the strongest demand in over six years, helping to calm investor nerves after a selloff earlier in the week drove yields on super-long-dated bonds to record highs. (Bond yields rise as prices fall.)
“The 30-year Japanese government bond (JGB) auction was unexpectedly strong,” said Shoki Omori, chief desk strategist for rates and FX at Mizuho in Tokyo. “Prior heavy selling appears to have created a sense of value, encouraging demand.” However, Omori cautioned that sentiment toward longer maturities remains fragile and further strong auctions will be necessary to improve the outlook. The yield on the 30-year JGB last fell 4 basis points to 3.38%.
The US dollar gained 0.1% to 155.32 against the yen, regaining some lost ground following reports from Reuters that the Bank of Japan is likely to raise interest rates in December, with expected government backing for the move.
US S&P 500 e-mini futures remained mostly unchanged as momentum from overnight US markets faded in Asia. Weaker-than-expected economic data reinforced expectations the Federal Reserve will cut interest rates next week. The Russell 2000 index jumped 1.9%, and the S&P 500 advanced for a second consecutive day, supported by a sharp decline in US private payrolls.
The US dollar index, which tracks the greenback against six major currencies, rose 0.1% to 98.99, breaking a nine-day losing streak.
The Chinese yuan fell slightly by 0.1% to 7.064 against the US dollar in offshore trading, while the Australian dollar gained 0.1% following data showing a surge in household spending in October. — Reuters
Special Analysis by Omanet | Navigate Oman’s Market
The robust demand for Japan’s long-term government bonds and signals of potential BOJ rate hikes highlight a shift toward greater market confidence and tightening monetary policy in Asia, which could influence capital flows into the region. For Omani businesses, this underscores the importance of monitoring currency and interest rate trends as global shifts may impact export competitiveness and financing costs. Smart investors should consider diversifying portfolios to include Asian markets while remaining cautious of rate volatility that could affect liquidity and borrowing conditions.
