Asian Stocks Gain to Shrug Off US Tech Concerns: Markets Wrap
What is causing Nvidia's stock to continue its significant selloff?
Nvidia's stock selloff continues due to investor profit-taking after the stock's significant rally, concerns about its valuation, and a potential rotation out of the technology sector into other parts of the market. The selloff has erased more than $400 billion from Nvidia's market capitalization, pushing it back below the $3 trillion threshold.
How has the yen's value changed, and what might cause further depreciation?
The yen has experienced a significant depreciation, falling to its lowest level since 1990, with a 15% decline in 2024 alone. This depreciation is mainly driven by the widening interest rate differential between Japan and the US, as the US maintains higher interest rates. Further depreciation could be caused by a stronger US economy, higher US interest rates, or a rapid deterioration of the Japanese economy.
What measures might Japan's central bank take according to market expectations?
According to market expectations, Japan's central bank might raise interest rates if underlying inflation continues to climb and begin reducing its huge bond-buying operations at some point in the future2. The central bank is also expected to cut its purchases of Japanese government bonds, though the timing and extent of the reduction are yet to be determined.