Japan’s ex-currency diplomat, Hiroshi Watanabe, who served from 2004 to 2007, stated that intervention in the currency market will not occur unless the yen weakens beyond 155 against the U.S. dollar. Watanabe believes the chance of intervention remains slim currently, as the yen’s recent declines have been moderate compared to drastic falls experienced in 2022.

According to Watanabe, the markets may be monitoring the 152 level against the greenback. However, Japanese authorities are unlikely to consider any break above that level as a strong enough reason to intervene. The yen recently traded at 151.68 against the dollar.

Crude oil prices surged to their highest level since October 2023 due to investor concerns over potential supply disruptions attributed to conflict in the Middle East. Brent futures were trading 0.21% higher at $89.53 per barrel, while West Texas Intermediate futures were up 0.25% at $85.62 per barrel.

Additionally, spot gold briefly hit a fresh high before surrendering some gains. It was last trading at $2,300.2 per ounce.

— Lim Hui Jie

Chinese authorities reportedly influenced the Swiss agrichemicals and seeds group Syngenta to withdraw its application for a $9 billion IPO due to concerns about the potential impact on a volatile market. According to sources, Syngenta received informal instructions from the China Securities Regulatory Commission (CSRC) in March to halt its bid for the planned listing.

Despite Syngenta planning to list in Shanghai and raise 65 billion yuan ($8.98 billion), the company eventually decided to withdraw its bid last week, considering the industry environment and its own development strategy.

— Lim Hui Jie, Reuters

The energy sector, up nearly 16% in 2024, achieved a remarkable feat by closing at a new record, a first since 2014. Crude oil futures played a crucial role in this milestone, reaching their highest levels since the previous October, led by geopolitical tensions and OPEC+ policy.

Among the major averages, the energy sector stands as the leader within the S&P 500, showing a second-quarter increase of 2.84%.

–Darla Mercado, Gina Francolla

Gold prices, Japanese stocks, and U.S. stocks are all reaching what Larry Jeddeloh of TIS Group and The Institutional Strategist newsletter dubs as “escape velocity.” Jeddeloh notes a significant surge in gold prices, emphasizing the absence of overhead resistance. The interest of central banks in diversifying their holdings by purchasing gold reinforces the positive outlook for the precious metal.

Regarding Japanese stocks, Jeddeloh explains that the Nikkei 225 index has already broken out to an all-time high. In his chart analysis, Jeddeloh suggests a long-term target of about 71,000 for the Nikkei 225, highlighting the market’s potential growth opportunities especially due to low ownership by domestic and international investors.

Similarly, the S&P 500 has reached escape velocity with strong earnings growth, GDP growth, and a central bank with limited interest rate policy options, thus fostering an advantageous environment for further growth.

See Chart…

Nikkei 225 index of Japanese stocks over past 12 months.

— Scott Schnipper

Several companies made significant moves in extended trading:

• Levi Strauss & Co: Shares surged by 8% after the company posted an earnings and revenue beat in the first quarter. Levi’s also raised its full-year profit guidance.
• Blackberry: The cybersecurity stock gained 7.8% after reporting better-than-expected quarterly results.
• Simulations Plus: The small cap stock rose over 7% after surpassing quarterly estimates and reaffirming its full-year guidance.

— Hakyung Kim

In pre-market trading, U.S. stock futures indicated minimal movement:

• Dow Jones Industrial Average futures: +4 points, or 0.01%
• S&P 500 futures: +0.04%
• Nasdaq-100 futures: +0.05%

— Hakyung Kim