Asia stocks held their ground on Monday, brushing off the surprise result of Japan’s election. The yen even gained slightly, showing that markets were already prepared for this outcome.
Japan’s ruling party lost its hold on the upper house. This weakens Prime Minister Shigeru Ishiba’s position. But traders didn’t panic. The yen rose 0.4% to 148.29 against the dollar. Markets had already expected a poor showing.
“Everyone thought it would be worse,” said Tsuyoshi Ueno, chief economist at Nissay Research Institute. He added that a weaker government could hurt Japan’s role in trade talks with the US.
Still, the Bank of Japan is unlikely to raise interest rates soon. Political risk usually means the yen stays under pressure.
With Japan’s stock market closed for a holiday, Nikkei futures traded slightly higher at 39,885.
Asia Stocks Look to Tech Earnings Next
Across Asia, markets were mixed.
- South Korea’s KOSPI gained 0.5%.
- Chinese blue-chip stocks rose 0.3%, led by rare earths and construction.
- MSCI’s Asia-Pacific index (excluding Japan) slipped 0.1%.
Investors are now watching earnings from major US tech companies. Alphabet, Tesla, and IBM report this week.
S&P 500 and Nasdaq futures were up 0.2% each, close to record highs.
There’s also strong interest in defense firms like RTX, Lockheed Martin, and General Dynamics. Global military spending has helped the sector jump 30% this year.
More Market Drama Coming?
Microsoft warned of cyber attacks on server software used by governments and companies. This added tension to markets already nervous about inflation and interest rates.
In the US, Fed Governor Christopher Waller repeated his push for a rate cut. But Fed Chair Jerome Powell wants to wait and see. Markets think a September cut is more likely than one in July.
Meanwhile, the European Central Bank is expected to hold its rate at 2%. Investors expect no new moves until tariff talks clear up.
The euro was flat at $1.1630, staying away from its recent highs.
Commodities Hold Steady
Gold rose 0.5% to $3,367 an ounce. Platinum saw more action last week, hitting a peak not seen since 2014.
Oil prices moved slightly.
- Brent crude was up 0.1% to $69.38.
- US crude rose 0.2% to $67.50.
OPEC+ may increase supply soon. But EU sanctions on Russia could still cut global oil exports.
What’s Next for Asia Stocks?
With Japan’s politics stable for now, and earnings season starting, the focus is shifting. Asia stocks could react sharply to US tech results and progress on trade talks between the US, EU, and China.
The big question now: Will markets stay calm, or is a shake-up on the way?
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