TOKYO
The yen surged 1 percent to 152.89 against the U.S. dollar on Tuesday, its strongest level since February, as markets repriced upward the probability of sustained Bank of Japan rate hikes extending into next year.
Carry trades that had exploited the BOJ's accommodative stance began to unwind. Japan's second-quarter GDP came in hotter than initially estimated, while real wage growth accelerated—data that BOJ officials are likely to cite when the central bank meets next week to consider another rate increase.
The currency's appreciation hammered Japanese exporters. The Nikkei 225 rose just 0.3 percent, while the broader MSCI Asia-Pacific index outside Japan gained 0.5 percent. South Korean shares led regional advances, climbing 2.3 percent, as memory chip makers benefited from yen weakness that levels the competitive playing field.
U.S. equity futures signaled caution. S&P 500 e-mini futures slipped 0.1 percent, though Chinese export growth accelerated in August—a data point some investors cited as a modest confidence boost. Chinese imports soared but came in below economist forecasts. Copper extended record highs on fresh concerns about supply shortages.
Crude oil added 0.4 percent to $97.49 a barrel as geopolitical risk premiums widened. Iran threatened "economic warfare" against the United States and said it had fired an advanced missile at U.S. warships. The status of shipping through the Strait of Hormuz remained unclear, contrary to President Donald Trump's early June statement that the chokepoint would remain open through Labor Day.
Brent has moved within striking distance of $100 a barrel for three consecutive sessions, a level it has not touched since May.
