Nikkei Trades At Record Highs

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Nikkei Trades At Record Highs

Nikkei Trades At Record Highs Ahead Of Powell

Nikkei, one of the leading stock indexes from Japan is trading at record highs as investors await the testimony from Fed chair Powell. The market players believe that Powell will provide insight on when the first rate cut is coming along with his views on the labor market condition.

Elsewhere, the EU stock markets are likely to open lower including the FTSE and the EURO STOXX 50 futures. Meanwhile, the Nasdaq futures are up by 0.3% on Monday as the chances of rate cuts continue to rise.

Coming back to the Nikkei, it has gained 1.5% during the trading session mainly due to the upside in the semiconductor stocks. Additionally, the MSCI which is also a famous index remains flat at the 2-year highs.

The same optimism is seen in the Taiwanese stocks as well which are seen at record highs. However, a little bit of profit taking was ween in Taiwan's market which led to a -0.3% decline. Meanwhile, the blue-chip stocks from China are up by 0.1% while the Hang Seng index from Hong Kong is down by 0.3%.

It is safe to say that most of the stock markets are bullish on the prospects that the biggest economy in the world is set to cut rates starting from September 2024. The recent labor market has already confirmed it which is why the chances of a rate cut are now sitting at 80%.

According to AMP's chief economist, the optimism seen in the markets is based on the hope that Powell will adopt a more dovish approach and will talk about rate cuts.

The DXY is seen trading near 105.01 against its peers which is also providing some relief to the CNY and the JPY. The USD/JPY exchange rate is around 161.00 and highlights the recovery of the Japanese Yen from its 38-year lows.

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