Morning Wrap: Tech Rally in Asia Following Micron Results and Weakening Yen Despite Hawkish BoJ

• Nikkei 225 gained nearly 2.9%, and KOSPI rose 0.9% driven by strong Micron results and outlook, as well as announced $200 billion in South Korean investments in US energy.

• The Yen is weakening noticeably (USDJPY rising near 158.30) despite a hawkish tone in the BoJ opinion summary, which investors viewed as a scenario fully priced in.

• Wall Street futures are rebounding sharply this morning (US100 up approx. 0.94%, US500 up approx. 0.47%), recovering from yesterday's weaker cash session close, where the Dow Jones touched June lows.

🇺🇸 Wall Street: How Did the Session End?

• Yesterday's cash session in the US ended mixed, with a clear lead from Big Tech: Dow Jones fell 0.86% (dropping to its lowest level since early June), S&P 500 declined 0.25%, Russell 2000 dropped 0.39%, while Nasdaq gained 0.24% thanks to gains in Apple, Amazon, and Alphabet, among others.
• US Treasury yields rose (10-year benchmarks around 5.29%), ignoring a lower PCE inflation reading and reacting to GDP revisions and lower Atlanta Fed GDP estimates.
• Morning futures trading indicates improving sentiment: US100 rises by approx. 0.94% to around 31,014 pts, US500 gains approx. 0.47% (around 7,757 pts), US2000 rises approx. 0.55% (around 2,835 pts), and US30 gains approx. 0.32% (approx. 51,453 pts). Strong equity gains are the result of Micron's earnings release.
• The VIX volatility index pulls back approx. 1.58% to around 17.46 pts, indicating market sentiment stabilization ahead of the European trading open.

🌏 Asia

• Japan's Nikkei 225 recorded a massive rally of approx. 2.89% to around 69,027 pts, driven by euphoria around the semiconductor sector following Micron's results.
• South Korea's KOSPI gained 0.9%, supported by demand for tech stocks and record chip export data in September.
• Hang Seng in Hong Kong rose slightly by approx. 0.18% (around 24,387 pts), while low activity prevails in mainland Chinese stock markets due to the start of Golden Week (China A50 unchanged near 13,936 pts).
• Australia's ASX 200 stood out with a drop of approx. 1.10% to around 8,617 pts under the weight of disappointing trade data and a plunge in manufacturing activity.

🇪🇺 Europe Before the Open

• Futures on European indices indicate a mixed start to the session following yesterday's losses on benchmark exchanges.
• DAX 40 (DE40) is trading near 25,257 pts with a modest gain of approx. 0.03%.
• Euro Stoxx 50 (EU50) hovers around 6,268 pts (up approx. 0.03%).
• UK's FTSE 100 (UK100) loses approx. 0.12%, dropping to around 10,617 pts.
• France's CAC 40 (FRA40) records a noticeable futures decline of approx. 1.37% to around 7,935 pts.
• European volatility index VSTOXX rises by 2.21% to around 18.53 pts, reflecting continued caution among investors on the Old Continent.

💱 Currencies and Commodities

• USDJPY jumps dynamically by approx. 0.64% near 158.32; the market sells off the yen, viewing hawkish comments from the BoJ as insufficient reason for an immediate rate hike.
• EURUSD hovers around 1.1316 (-0.11%), and GBPUSD is traded near 1.3248 (-0.09%), aligning with a return of US dollar strength following hawkish remarks from the Fed.
• USDPLN rises by approx. 0.22% to around 3.855 PLN, following a stronger dollar across the broader market.
• The Canadian dollar (USDCAD near 1.4246) and the New Zealand dollar (NZDUSD at 0.5618) reached multi-month lows against the USD.
• Gold gains approx. 0.59% to around $4,181/oz, rebounding after yesterday's drop near $4,140, while silver rises approx. 1.41% to around $61.17/oz.
• Crude oil remains under pressure: Brent crude falls approx. 1.15% to around $96.79, and WTI drops approx. 1.49% to around $88.97, coinciding with a Dallas Fed survey forecasting WTI near $88 at year-end.

📊 Macroeconomics: What Data Was Released?

• Japan — Tankan Index (Q3): Big manufacturers' sentiment rose to 24 pts (forecast 25 pts, previous 22 pts), reaching its highest level since 2018; the index for the service sector came in at 35 pts (forecast 36 pts, previous 37 pts).
• Japan — Manufacturing PMI (September, final): 54.1 pts, in line with the initial estimate and previous reading, signaling sustained moderate expansion, although the pace of new orders slowed.
• Japan — Summary of BoJ Opinions: Members signaled readiness to accelerate rate hikes if inflation sustainably exceeds 2%, highlighting rising price pressure and oil costs.
• South Korea — Foreign Trade (September): Exports surged 83.5% YoY (forecast 62.5%, previous 68.7%), driven by record semiconductor shipments; imports rose 26.0% YoY (forecast 21.0%), and the trade surplus reached a record $49.85 billion.
• Australia — Trade Balance (August): The surplus narrowed to AUD 0.50 billion versus a forecasted AUD 2.00 billion (previous AUD 1.35 billion) due to a 5.8% MoM jump in imports of data center equipment (exports rose 3.7% MoM).
• Australia — Manufacturing PMI (September): Dropped to 49.6 pts from 52.0 pts in August — the sector entered contraction territory with the sharpest fall in production in 21 months.
• Taiwan — Manufacturing PMI (September): Strong increase to 56.7 pts from 54.7 pts in August, confirming excellent economic conditions in the Asian tech sector.

🔑 Key Overnight Developments:

• US-Iran Geopolitics: US Secretary of State Marco Rubio ordered the Iranian UN delegation (including Foreign Minister Araghchi) to leave New York after diplomatic talks failed, described as a rare diplomatic move; Qatari mediators continue working on a compromise.
• Escalation in Pakistan-Afghanistan Relations: Pakistani authorities conducted airstrikes on militant hideouts inside Afghanistan; reports indicate over 20 people were killed and weapons depots destroyed.
• Fed Policy: Neel Kashkari assessed that US inflation remains too high (approx. 3%), the neutral rate may be higher than previously assumed, and signaled the need for another rate hike this year and another in 2027.
• RBA Financial Stability Review: The Reserve Bank of Australia noted that rising financial leverage and asset valuations expose global markets to a sharp correction, with main risks stemming externally; meanwhile, the domestic residential mortgage sector remains resilient to potential property price drops.
• Energy and Technology South Korea – US: Donald Trump announced a plan for $200 billion in South Korean investments in the US nuclear, gas, and LNG sectors, though South Korean President Lee emphasized that projects (including Alaska LNG) must first prove commercial viability.
• Crypto Regulations: European Union authorities called on Binance for explanations regarding continued operations despite a previous order to wind down activities.

📅 What's on the Agenda Today?

• 09:15 – 10:00 | Eurozone: Series of final September Manufacturing PMI readings (including Spain exp. 50.2; Italy exp. 50.1; Germany exp. 53.8; overall Eurozone exp. 52.7).
• 10:00 and 15:30 | Central Banker Speeches: Speech by BoE Governor Andrew Bailey (10:00) and ECB President Christine Lagarde (15:30).
• 11:00 | Eurozone: August Unemployment Rate (consensus: 6.4%).
• 14:30 | US: Weekly Initial Jobless Claims (consensus: 201k vs 197k previous).
• 16:00 | US: September ISM Manufacturing Index (consensus: 54.8 pts vs 54.6 pts in August) and ISM Prices Paid sub-index (consensus: 72.9 pts).
• 15:05 – 21:30 | US: Marathon of FOMC member speeches (including Barkin, Collins, Schmid, Waller at 16:00, Jefferson, Bowman, and Cook).

🔎 Suggested for Observation

• Nikkei 225 — Extreme overbought territory on a multi-year basis (5y z-score at +2.60) and a sharp +2.82% surge following the semiconductor sector increase the risk of a technical correction.
• WTI Crude — A -1.58% drop to $88.89 places the market on the edge of key technical support amid dovish forecasts from the Dallas Fed survey and rerouted tanker paths in the Persian Gulf.
• Zcash — An extremely high statistical anomaly (5y z-score at +4.91) combined with a sharp weekly decline (-10.25%) creates room for heightened volatility.
• Japanese Yen — USD/JPY breaks out toward 158.30 in response to receding prospects of BoJ rate hikes and continued US dollar dominance.