Asian stocks rally as Nikkei nears record quarterly surge, yen sinks

Asian stocks jumped on Tuesday as the quarter drew to a close, with Japan’s Nikkei headed for a record quarterly gain of more than 36% and South Korea’s KOSPI set for a second-quarter rise of nearly 65%. The move came alongside a stronger dollar that pushed the yen to 162.41 per dollar in Asia trade, its weakest level since 1986. For U.S. readers, the combination points to a market still willing to chase risk, but only while the Federal Reserve backdrop, rate expectations and a resilient U.S. economy keep the dollar in front.

The KOSPI’s advance was driven heavily by semiconductor names, and the index had more than doubled from the start of the year. Japan’s rally was powered by technology stocks and the AI trade, giving the Nikkei a run that put it on pace for its biggest quarterly surge on record. The breadth of the gains still matters less than the leadership underneath them: chips in Seoul and tech in Tokyo have carried much of the region’s headline strength, making the rally look more like a momentum trade than a broad reacceleration in earnings.

A key reason the market could keep climbing was the retreat in oil prices. Brent crude settled at $73.74 a barrel on June 24, its lowest level since before the U.S.-Israel war against Iran began on Feb. 28. That helped ease one of the biggest drags on global growth sentiment after the recent U.S.-Iran conflict, and it also fed the stronger-dollar move that sent gold to its largest quarterly fall in more than a decade. The same calm that lifted equities also sharpened the contrast in currencies, leaving the yen under pressure even as stocks celebrated.

Japan’s Finance Minister Satsuki Katayama said authorities stood ready to respond to excessive currency moves, underscoring how quickly a weak yen can turn from support for exporters into a political and economic problem. A cheaper yen can cushion Japanese manufacturers abroad, but it also raises import costs at home and complicates the effort to steady inflation. With the dollar headed for a fourth straight quarterly rise, the message from Asia’s finish is mixed: investors are still buying global risk, but much of the quarter-end surge is being propelled by currency moves, rate bets and a fading war premium rather than a clean, durable wave of optimism.