The Japanese yen rose in Asian trading on Thursday against a basket of major and minor currencies, resuming its gains after pausing on Wednesday against the U.S. dollar, following data showing a rise in wages in the world’s fourth-largest economy.

The figures pointed to mounting inflationary pressures on policymakers at the Bank of Japan, increasing the likelihood that the central bank will raise interest rates at its final meeting of the year in December.

Price Overview

• USD/JPY: The U.S. dollar fell 0.2% to 153.79 yen, down from an opening level of 154.11, after touching an intraday high of 154.14.

• On Wednesday, the yen closed 0.3% lower versus the dollar, after rising 0.35% the previous day as part of a recovery from an eight-month low of 154.48.

Japanese Wages

Japan’s Ministry of Labor reported Thursday that total monthly cash earnings and a separate measure of full-time wages rose 1.9% year-on-year in September, in line with market expectations, after a 1.3% increase in August.

The recovery in wages could pave the way for further price gains and faster inflation in the months ahead. Undoubtedly, growing inflationary pressure on the Bank of Japan is strengthening the case for an upcoming rate hike.

Japanese Interest Rates

• Following the data, market pricing for a 25-basis-point rate increase at the Bank of Japan’s December meeting rose from 58% to 65%.

• To reassess those expectations, investors are awaiting further data on inflation, unemployment, and wage trends in Japan, as well as comments from Bank of Japan officials.

One year after President Donald Trump’s re-election, the U.S. stock market continues to notch fresh record highs.

The S&P 500 has gained 19.6% over the past 12 months, supported by strong corporate earnings and investors’ enthusiasm for artificial intelligence. Equities have shown remarkable resilience, defying concerns over renewed trade tensions and bouts of volatility.

For Trump, the market’s performance is proof that his policies are working. On October 28, during his visit with Japanese Prime Minister Sanae Takaichi, Trump said: “Their market today and our market today both hit record highs. That means we’re doing something right.”

However, many analysts argue that robust corporate profits — combined with the massive AI-driven rally — are the true forces behind these gains.

Keith Lerner, chief market strategist at Truist, explained: “What happens in Washington matters, but it isn’t everything. Despite all the shifting narratives, the core story this year remains the dominance of technology and AI, and the continued strength of U.S. companies.”

Reaching Record Highs

Jed Ellerbrock, portfolio manager at Argent Capital Management, said the market’s resilience has been surprising given Trump’s “radical changes” to trade policy and his persistent pressure on the Federal Reserve to cut interest rates.

“Trump has introduced a lot of uncertainty into the markets, and markets hate uncertainty,” he said.

Still, investors shifted their focus to the AI boom and largely ignored tariff-related concerns. “The AI investment cycle is massive and unprecedented — it overshadows everything else,” Ellerbrock added.

The S&P 500, weighted by market capitalization, has become increasingly concentrated in big tech names. Nvidia’s market value has reached $5 trillion, representing 8% of the index’s total capitalization.

By contrast, the equal-weight version of the S&P 500 — which gives every stock the same weight — has risen only 6% over the past year, compared to 19.6% for the main index.

Weathering the Tariff Turbulence

The S&P 500 plunged 19% in April when Trump announced his plan to impose new tariffs.

However, as markets fell, the administration softened its harshest proposals, allowing stocks to rebound.

“Equities may have rallied because the final tariff measures were less severe than feared,” said Mark Malek, chief investment officer at Siebert Financial.

“If not for the earlier tariff-induced selloff, markets might be even higher today.”

According to CFRA Research, the S&P 500’s performance from Trump’s re-election through the end of October ranks as the eighth-best first-year showing for a U.S. president since World War II.

By comparison, the index surged about 38% during Joe Biden’s first year in office — the best first-year performance in modern history.

Still, U.S. market gains appear modest next to some global peers: South Korea’s KOSPI is up 66% over the past 12 months, Hong Kong’s Hang Seng has risen 28%, and Poland and Greece have climbed roughly 52% and 60%, respectively.

Ups and Downs Under Trump

Even as equities trade near record highs, U.S. bonds have also performed strongly.

Despite concerns about the widening U.S. deficit, Trump’s sweeping “One Big Beautiful Bill Act,” and his attacks on the Fed’s independence, investors have continued to flock to U.S. Treasuries.

The 10-year Treasury yield has fallen from 4.4% in November 2024 to 4.1% this month.

Meanwhile, the CBOE Volatility Index (VIX) has remained subdued for most of the past six months, and bond market volatility is nearing its lowest levels of the year.

Treasury Secretary Scott Bessent told the Financial Times: “We want ‘America First’ policies as much as possible — without spooking the market. What gets people into trouble is ignoring the market. You have to respect it.”

Carrying the Baton Forward

Following Trump’s re-election, investors welcomed the prospect of lighter regulation and tax cuts at a time when the Federal Reserve had recently lowered interest rates, further boosting equities.

Ross Mayfield, investment strategist at Baird, said: “The administration has largely delivered on what investors were optimistic about.

Ultimately, this remains an AI-driven bull market. The administration picked up the baton midway through a rally that still has room to run.”

Mayfield expects further gains but also anticipates a correction after the current strong leg higher. “I don’t expect a smooth ride. We could see a 10% to 15% pullback over the next 12 months.”

David Solomon, CEO of Goldman Sachs, shares a similar outlook, saying he expects a 10% to 20% decline in stocks over the next two years: “Markets rise, then pull back for investors to re-evaluate.”

As the S&P 500 continues setting new highs, it is increasingly reliant on large tech and AI firms — leaving retail investors and pension funds more exposed to the risks of a sudden reversal.

Keith Lerner of Truist concluded: “The quiet star of this bull market is corporate earnings.

But with valuations now at historically elevated levels, risks remain. When the market hasn’t seen a correction since April, it becomes more vulnerable to any negative surprise — whatever its source.”

U.S. stock indexes rose on Wednesday following upbeat economic data and a rebound in the technology sector.

ADP data showed that the U.S. private sector added 42,000 jobs in October, surpassing expectations of 22,000, compared to a loss of 29,000 jobs in September.

Meanwhile, Wall Street heavyweights warned that global equity markets could face a potential sharp correction, cautioning against overstretched valuations in artificial intelligence-related stocks.

David Solomon, CEO of Goldman Sachs, said at the Global Financial Leaders’ Investment Summit in Hong Kong, “We’re likely to see a 10% to 20% pullback in equity markets over the next 12 to 24 months.” He added, “Markets move up and then they pull back so investors can re-evaluate.”

Solomon noted that such cyclical declines are a normal feature of long-term bull markets, emphasizing that Goldman’s consistent advice to clients remains to stay invested and review portfolio allocations rather than attempting to time the market.

“A 10% to 15% market drop happens quite often, even during periods of positive growth,” Solomon said. “It doesn’t change the underlying or structural convictions around how capital should be allocated.”

Ted Pick, CEO of Morgan Stanley, echoed the sentiment during the same panel, saying that investors should welcome market corrections as healthy developments rather than signs of a looming financial crisis.

“We should welcome the possibility of 10% to 15% pullbacks, as long as they’re not driven by major economic shocks,” Pick stated.

Their comments followed warnings from the International Monetary Fund (IMF) about the risk of a sharp correction, while Federal Reserve Chair Jerome Powell and Bank of England Governor Andrew Bailey also expressed concern over excessive stock valuations.

As of 16:58 GMT, the Dow Jones Industrial Average rose 0.4% (175 points) to 47,260, the S&P 500 gained 0.7% (44 points) to 6,816, and the Nasdaq Composite advanced 0.9% (218 points) to 23,564.

Copper prices rose on Wednesday after suffering losses for five consecutive sessions, following a record high late last month. The rebound came as broad-based selloffs in global equity markets weighed on investor appetite for base metals.

Data from the London Metal Exchange (LME) showed that five out of six key industrial metals posted losses in early Asian trading, marking copper’s longest losing streak since July.

Copper had surged to record highs last week, supported by optimism over a potential trade deal between the United States and China, along with supply-related concerns.

However, sentiment has since weakened amid growing uncertainty surrounding elevated equity valuations and mixed expectations for further U.S. interest rate cuts. This has also fueled a stronger U.S. dollar, adding pressure on dollar-denominated commodities.

Copper fell 0.4% to $10,625 per metric ton by 10:07 a.m. Shanghai time, down about 5% from its all-time high of $11,200 reached on October 29.

Aluminum declined 0.4%, zinc slipped 0.5%, and Singapore iron ore futures fell 0.4%.

In U.S. trading, December copper futures edged up 0.1% to $4.95 per pound as of 15:16 GMT.