Tech Surge Powers Record Highs in Japanese and Taiwanese Markets

Stock markets in Japan and Taiwan soared to unprecedented levels on Thursday, fueled by strong performances in the technology sector and optimistic investor expectations for upcoming U.S. inflation data. Traders are betting on a forthcoming interest rate cut by the Federal Reserve, potentially followed by two more reductions by year's end.

Meanwhile, the European Central Bank is anticipated to keep interest rates steady amid uncertain trade and political scenarios, leaving room for potential future easing. In the commodity market, oil prices remained elevated due to escalating geopolitical tensions, including Poland's interception of suspected Russian drones and U.S. pressures for EU sanctions on Russian oil purchasers. Concurrently, gold prices approached all-time highs.

Japan's Nikkei index rose by 0.8%, driven by gains in technology, energy, and utility sectors, while Taiwan's market recorded a 1% increase, bolstered by a 2.5% rise in TSMC shares. Overnight, the benign U.S. producer price index resulted in increased expectations for an aggressive rate-cutting cycle by the Federal Reserve. Investors are now focusing on the upcoming consumer price index release, which could further influence market dynamics.