Asian stock markets rose on Tuesday, led by a strong rise in Japanese shares as investors bet on technology and AI-led growth. At the same time, uncertainty over the independence of the US Federal Reserve pushed up gold prices and put pressure on the dollar.Japan’s Nikkei index jumped 3.4% to a record high after reopening after the holidays, as a weaker yen and expectations of fiscal stimulus improved sentiment. Gains in Japan helped lift regional markets, with South Korean and Taiwanese shares also hitting all-time peaks, while Chinese blue-chip shares hit a four-year high.MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.8% to a new record. In Europe, Eurostoxx 50 futures rose 0.2%, Germany’s DAX futures rose 0.1%, while FTSE futures were flat, according to Reuters. Analysts said enthusiasm for artificial intelligence continues to support global equities. “We see global equities continuing to rise in 2026, with an upside target of around 10% for MSCI AC World by year end,” Citi analysts warned. High valuations leave little room for disappointment if earnings decline, he warned.US stock futures fell ahead of key inflation data, with S&P 500 futures down 0.2% and Nasdaq futures down 0.3%. Markets await December’s US consumer price index, which is projected to see core inflation rise to 2.7%, although some expect a higher reading of 2.8%. US earnings season also begins this week, with reports from major banks including JPMorgan Chase, Citigroup and Bank of America.Bank executives may face questions over President Donald Trump’s call to impose a one-year cap of 10% on credit card interest rates starting January 20. Banks have warned that such a move could disrupt access to credit for millions of families and small businesses.
Gold shines amidst uncertainty
Investors were wondering how the US Justice Department’s criminal investigation against Federal Reserve Chairman Jerome Powell might affect the markets. Analysts fear the Fed could be pressured to keep interest rates low for too long, increasing the risk of higher inflation later on.The uncertainty weighed on the dollar, with the dollar index stopping near 98.88 after falling more than 0.25% overnight. The euro rose to $1.1665, while the dollar slipped against the Swiss franc.The dollar was steady at 158.40 against the yen, even as Japan’s currency was near a multi-year low. Japan’s Finance Minister Satsuki Katayama said he had raised concerns about the yen’s unilateral weakening to US Treasury Secretary Scott Besant.Gold rose as investors felt uncertain, rising above $4,600 an ounce for the first time before falling slightly. “Gold serves as a last resort for fear and uncertainty given its reputation as a safe haven and store of value, and the fact that it is non-debounceable, and not someone else’s liability,” said Christopher Looney, gold strategist at RBC Capital Markets. Looney said prices could rise to $5,200 by the end of the year.Oil prices also climbed and hit a seven-week high on concerns that unrest in Iran could disrupt supplies. Brent crude rose 0.5% to $64.19 a barrel, while US crude rose 0.5% to $59.81. Escalating tensions, Trump warned that any country doing business with Iran would face 25% tariffs on its trade with the United States.
