Asian Markets Mixed as Bank of Japan Raises Rates to Highest Since 1995

Trading in Asia was mixed on Wednesday morning. Japan’s Nikkei rose about 0.2% after hitting a fresh record earlier in the session, Hong Kong’s Hang Seng fell 1.6%, Shanghai was flat, and South Korea’s Kospi gained 2%. U.S. futures were steady.

The Bank of Japan raised interest rates to 1%, in line with economists’ expectations, taking borrowing costs to their highest level since 1995. CNBC said the tightening comes as Japan deals with a weaker yen and rising inflation, partly because of the war against Iran.

In commodities, oil was stable after dropping about 5% the previous day as investors priced in the reopening of the Strait of Hormuz. Brent crude traded near $83 a barrel and U.S. West Texas Intermediate near $80. The dollar index, which measures the U.S. currency against a basket of peers, was up about 0.15%.

Wall Street closed sharply higher on Tuesday, helped by positive momentum around SpaceX and stronger risk appetite. The Nasdaq jumped 2.9%, its second strongest day of the year, while the S&P 500 rose 1.7% and the Dow Jones hit a new record. MarketWatch said the Nasdaq’s average daily swing over the past seven sessions was about 1.98%, its highest volatility in more than a year.

SpaceX climbed another 20% to a market value of about $2.5 trillion, making it the world’s sixth-largest company after TSMC. The company raised a record $75 billion in its offering, which traders see as the start of a strong summer for listings, including expected IPOs from OpenAI and Anthropic. Analysts were split, with Zacks strategist Brian Mulberry saying the trading looked orderly, while Wedbush’s Dan Ives called the listing a turning point for tech and suggested Tesla could eventually merge in some form into SpaceX/xAI. Others warned the valuation is stretched because SpaceX is not yet profitable.

Semiconductor stocks also rallied, led by Micron, Nvidia, AMD, Marvell and Broadcom, and the SOXX ETF hit an all-time high and is up 100% this year. Micron rose after TD Cowen lifted its target to $1,500, more than 50% above current levels. Nvidia said it will raise at least $20 billion in bonds to fund AI investment, adding to concerns about the huge capital spending plans across the sector, after Alphabet announced an $80 billion capital-raising plan earlier this month and Super Micro Computer fell more than 20% in one day last week after a $7 billion fundraising announcement.

Oil’s earlier drop weighed on Chevron and Exxon Mobil, but it lifted airline and cruise shares, including United Airlines, Delta Air Lines, Royal Caribbean and Carnival. Gold surged more than 3%, and Freeport-McMoRan rose as easing diplomatic tensions reduced expectations that the Federal Reserve will need to raise rates later this year.