Global equities rallied Wednesday as the Bank of Japan raised its benchmark interest rate to the highest since 2008. MSCI’s Asia equity index rose 1.8%, with Japanese lenders leading the gains. European chipmakers also surged, while the S&P 500 and Nasdaq 100 aimed to recover from Tuesday’s losses.
Federal Reserve Chair Jerome Powell is expected to signal a potential rate cut for September. Meta Platforms Inc. will report earnings after disappointing results from Microsoft. Eurozone inflation data is also due.
Markets fluctuated as traders processed the BOJ’s decision and anticipated the Fed’s move. The yen rose 0.4% against the dollar, and Treasuries steadied after a four-session decline.
Chipmakers rallied on news that US President Joe Biden’s administration plans to exempt manufacturers from Japan, South Korea, and the Netherlands from upcoming export restrictions to China. Tokyo Electron Ltd. and ASML Holding NV led the gains in Asian and European chip stocks, respectively.
HSBC Holdings Plc gained 3% in London, announcing an additional $3 billion return to shareholders. Oil prices rose amid heightened tensions in the Middle East, and gold gained for a second day.