Nikkei Tops 71,000 as AI Rally Overshadows Fed Shock

Asian Stocks Rise Despite Fed Tightening Fears

Copper, Zinc and Other Commodities Fall

U.S. stocks fell after the Federal Reserve’s rate decision on June 17, but investors viewed the post-Federal Open Market Committee pullback as less severe than feared. On June 18, S&P 500 futures rose as much as 0.8% from the previous close during the session, while Nasdaq futures gained 1.3%.

Reuters reported that lower oil prices, after a temporary agreement between the U.S. and Iran, were easing inflation pressures and supporting interest-rate-sensitive growth stocks.

Japan’s Nikkei 225 closed 1.77% higher at 71,053.49 on June 18. The weaker yen, gains in AI and semiconductor shares, and easing Middle East risks outweighed concerns over Fed-driven rate increases.

The Nihon Keizai Shimbun reported that gains in the Philadelphia Semiconductor Index on Wall Street helped drive AI- and chip-related shares in Japan. A weaker yen is typically positive for Japanese exporters because overseas sales translate into larger profits in yen terms.

Taiwan’s Taiex Index also advanced on June 18, closing up 1.28% at 46,465.2. Semiconductor shares led the gains there as well. TSMC rose 1.05% from the previous session to NT$2,410.

By contrast, nonferrous metals that had been climbing turned lower across the board on the Fed shock. In afternoon trading on June 18, copper on the London Metal Exchange, based on CFDs, traded at $6.38 a pound, down about 1.6% from the previous session. Zinc fell about 0.7% to $3,576.7 a metric ton, while nickel slipped 0.9% to $17,921.2 a ton.

The move reflected stronger concerns about weaker demand as participants in commodity futures markets bet on the possibility of higher interest rates.

Bloomberg reported that copper and zinc, as economically sensitive industrial metals, tend to reflect concerns about slower manufacturing activity and weaker investment demand when expectations for higher rates increase. After several months in which risks related to a U.S.-Iran war influenced prices, interest rates and demand expectations are once again driving the market, it added.

Kim Dong-hyun, Hankyung.com reporter 3code@hankyung.com