Japanese and South Korean stock markets rise together, KOSPI breaks through 7,000 to hit a 15-day high, yen briefly rises above 153

South Korean chip stocks surged, lifting Asian stock markets, while commodities rallied across the board. The yen extended its strength, with expectations of a rate hike by the Bank of Japan intensifying in the market.

On Tuesday, the KOSPI index jumped by 2.1%, closing above the 7,000 mark for the first time in 15 trading days. Samsung Electronics and SK Hynix led the gains, benefiting from optimistic expectations for high-performance storage chip demand after OpenAI unveiled its new artificial intelligence model, Astra.

The MSCI Asia Pacific Index rose by 0.4% overall, but Japan's TOPIX and Australia's ASX 200 each edged down about 0.6%.

The yen strengthened to 152.89 during Tuesday's session, its highest level since February, with a cumulative monthly gain of 4.2%, making it the top performer among G10 currencies.

Japan’s Finance Minister Satsuki Katayama reiterated at Tuesday’s briefing that Japan’s stance on exchange rates has not changed since the joint intervention with the US. The authorities will work to maintain orderly foreign exchange markets and stay in close contact with US Treasury Secretary Janet Yellen.

In commodities, international benchmark Brent crude oil rose 0.5% to $97.46 per barrel, spot gold climbed 0.7% to $4,433 per ounce, and LME copper futures set a new record high for the second day in a row on Tuesday.

The MSCI Asia Pacific Equity Index increased by 0.4%, and the KOSPI jumped 2.1%, mainly boosted by chip giants SK Hynix and Samsung Electronics. The tech-heavy Nasdaq 100 futures contract rose 0.4%.

Expectations for AI industry chain demand provided the direct catalyst for the recent rally in South Korean chip stocks. WallstreetCN mentioned that after OpenAI released the new generation AI model Astra, optimism over high-performance storage chip demand clearly intensified.

The KOSPI surpassed the 7,000 mark for the first time in 15 trading days, having surged 4.61% the previous day to close at 6,995.39, just 4.61 points shy of the 7,000 psychological level. In early trading, SK Hynix and Samsung Electronics rose 4.8% and 2.8%, respectively.

The yen extended Monday’s gains, with the USD/JPY exchange rate briefly breaking below 153. The yen’s latest rally has pushed its monthly gain against the dollar to about 4.2%, making it the best-performing G10 currency.

The current rally in the yen is a delayed realization of the effects of the large-scale market intervention about a month ago. In previous market interventions, Japan used a total of about 15.4 trillion yen (around $101 billion), and the US provided coordinated support for the yen for the first time in 28 years.

However, the initial effect of this intervention was limited, with the yen hovering near 160 until September 2. Recently, with rising expectations of a shift in Bank of Japan policy and speculation on possible adjustments in the Government Pension Investment Fund (GPIF) asset allocation, short positions on the yen began to be unwound rapidly, finally triggering a real rally.

According to Bloomberg, SMBC Nikko Securities senior rates and FX strategist Rinto Maruyama said that the yen falling below 154 could trigger large-scale carry trade closures and stop-loss cascades, creating room for further appreciation. However, he also pointed out that the current light net positioning means investors have room to rebuild yen short positions.

Japanese Finance Minister Satsuki Katayama stated at Tuesday’s press conference that Japan’s currency policy position had not changed since the joint intervention with the US, and authorities would strive to maintain orderly market conditions. She added that she would continue to keep close contact with US Treasury Secretary Janet Yellen.

A report released by the Japanese government on Tuesday showed that Japan’s economic growth in the second quarter exceeded previous expectations. Meanwhile, the July wage growth hit its highest level in nearly 30 years, supporting market expectations that the Bank of Japan will raise rates at next week’s meeting.

From a medium-term perspective, NAB strategist Catril believes that a BOJ rate hike next week is necessary, but "to sustain recent gains, the Bank of Japan needs to deliver a hawkish signal and reiterate that another rate hike this year remains more likely than not."

Some analysts take a more cautious stance. Akira Moroga, chief market strategist at Aozora Bank, believes that the widening US-Japan rate differential and Japan’s trade deficit remain structural negatives for the yen. Following the end of the current position adjustment, USD/JPY may rebound to 155, with the pair likely to remain range-bound in the near term.

Motonari Sakai, forex and financial products dealing manager at Mitsubishi UFJ Trust and Banking, pointed out that even if Friday’s US inflation data comes in below expectations, Fed Chair Jerome Powell’s cautious approach toward inflation is unlikely to change, which could reactivate the trend of a stronger dollar and weaker yen.

Traders are closely watching details of the agreement between Iran and Oman on the management of shipping in the Strait of Hormuz.

WallstreetCN mentioned that, according to Global Times on September 8, Ali Shamkhani, secretary of Iran's Supreme National Security Council, announced on September 6 that Iran will implement new restrictions in the Persian Gulf and the Gulf of Oman. The new prohibited zones will extend from the US Navy’s blockade line to loading ports, and ships operating without coordination with Iran will be blacklisted for sanctions and could face voided insurance and further passage restrictions.

Meanwhile, Iranian Foreign Ministry spokesperson Esmail Baghaei confirmed that the agreement between Iran and Oman on managing Strait of Hormuz shipping has entered the final stage and will include a temporary security corridor, with plans to file for registration with the International Maritime Organization.

This news caused oil prices to briefly retreat, as optimism that the Iran-Oman agreement would ease shipping bottlenecks temporarily weighed on gains. However, overall oil prices remained elevated, with Brent crude still trading around $97 per barrel, near a six-week high.

Partners Group chief investment strategist Anastasia Amoroso said in a Bloomberg TV interview that as rising oil prices increase the likelihood of further central bank rate hikes, global stock markets could enter a consolidation phase.

LME copper extended its overnight strength on expectations that the Trump administration may broaden tariffs to include imports of refined metals, surging 0.69% in Asia-Pacific trading on Tuesday and breaking through the 14,600 mark.

Spot gold prices reversed their decline from the previous day, rising 0.7% during the session.