Asian share markets rose on Tuesday, led by a strong rally in Japanese stocks as investors bet on technology and AI-led growth. At the same time, uncertainty over the independence of the US Federal Reserve lifted gold prices and pressured the dollar.Japan’s Nikkei index surged after reopening from a holiday, jumping 3.4% to record highs as a weaker yen and expectations of fiscal stimulus lifted sentiment. Gains in Japan helped push regional markets higher, with South Korean and Taiwanese stocks also touching all-time peaks, while Chinese blue-chip shares climbed to a four-year high.MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.8% to a fresh record. In Europe, EUROSTOXX 50 futures gained 0.2%, Germany’s DAX futures added 0.1%, while FTSE futures were flat, according to Reuters. Analysts said that enthusiasm around artificial intelligence continued to support global equities. “We see global equities continuing to climb in 2026, targeting around 10% upside for the MSCI AC World by year-end,” Citi analysts said, while cautioning that high valuations leave little room for disappointment if earnings fall short.US stock futures edged lower ahead of key inflation data, with S&P 500 futures down 0.2% and Nasdaq futures off 0.3%. Markets are awaiting the December US consumer price index, with forecasts pointing to core inflation rising to 2.7%, though some expect a higher reading of 2.8%. The US earnings season also begins this week, with major banks including JPMorgan Chase, Citigroup and Bank of America due to report.Bank executives are expected to face questions over President Donald Trump’s call for a one-year cap on credit card interest rates at 10% starting January 20. Banks have warned such a move could restrict access to credit for millions of households and small businesses.
Gold shines amid uncertainty
Investors were wondering how the US Justice Department’s criminal investigation into Federal Reserve Chair Jerome Powell could affect markets. Analysts fear the Fed may be pushed to keep interest rates too low for too long, increasing the risk of higher inflation later.The uncertainty weighed on the dollar, with the dollar index stuck near 98.88 after falling over 0.25% overnight. The euro edged up to $1.1665, while the dollar slipped against the Swiss franc.The dollar was steadier against the yen at 158.40, even as Japan’s currency hovered near multi-year lows. Japan’s finance minister Satsuki Katayama said she had raised concerns about the yen’s one-sided weakness with US Treasury Secretary Scott Bessent.Gold rose as investors felt uncertain, climbing above $4,600 an ounce for the first time before falling slightly. “Gold serves as a catch-all, and a default hedge of last resort for fear and uncertainty given its reputation as a safe haven and store of value, the fact that it is non-debaseable, and is no one else’s liability,” said Christopher Louney, a gold strategist at RBC Capital Markets. Louney added that the prices could rise as high as $5,200 by the end of the year.Oil prices also climbed, reaching seven-week highs on concerns that unrest in Iran could disrupt supplies. Brent crude rose 0.5% to $64.19 a barrel, while US crude gained 0.5% to $59.81. Adding to tensions, Trump warned that any country doing business with Iran would face a 25% tariff on its trade with the United States.
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