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News
Wednesday, June 03, 2026
What’s happening: Japan’s leading stock indices Nikkei 225 rose sharply this morning, reversing losses made in the previous session.
What happened: Japanese stocks rose despite elevated concerns around the fragility of the US-Iran ceasefire.
Investor sentiment was lifted by a broader rally in AI stocks and rising semiconductor demand.
Why it matters: Japanese equities surged this morning, reversing Tuesday’s steep decline after Israel intensified its offensive against Lebanon.
Investors looked past the uncertainties around the US-Iran negotiations, after US Secretary of State Marco Rubio said on Tuesday that Iran is attacking commercial ships and had mined “large segments” of the Strait of Hormuz.
The US military said that it had conducted strikes on Qeshm Island in the Strait of Hormuz in “self-defence” and in response to Iran’s attempted attacks across the Middle East.
The Japanese stock market climbed amid a broader upturn in the Asian markets, mirroring the positive trajectory of US indices, which rose again due to a rally in AI-related stocks.
Shares of SoftBank, which has been focusing on AI, robotics, and semiconductors, rose sharply this morning. Kioxia’s stock climbed after the memory maker raised its growth projections for flash memory demand. Shares of semiconductor production equipment maker Tokyo Electron and semiconductor testing equipment maker Advantest also surged amid a broadly rally in AI stocks.
Japan’s S&P Global Composite PMI fell to 51.1 in May, from 52.2 in the previous month. Despite the decline, the figure came in-line with expectation and marking the 14th consecutive month of expansion in private sector activity.
Nikkei 225 surged 2.57% to 68,452.45 this morning.
What to watch: Investors will continue monitoring the progress in negotiations between the US and Iran.
Bank of Japan Governor Kazuo Ueda’s speech (1230 UAE Time) will remain in focus, as market look for cues on whether policymakers will support an interest rate hike.
Context: The euro slipped versus the US dollar this morning as investors digested the latest economic reports.
Details: Data released on Tuesday showed that the Eurozone’s consumer price inflation accelerated to 3.2% in May, from the previous month’s reading of 3.0%.
Although figure came in-line with market expectations, it represented the steepest rate since September 2023 and remained significantly above the European Central Bank’s 2.0% target.
Inflation was fuelled by an almost 11% rise in energy costs, the steepest since February 2023, with the Strait of Hormuz remaining closed for much longer than expected.
France’s new passenger car registrations grew by a higher-than-expected 3.70% in May, following a decline of 0.3% in April.
Strength in the US dollar also weighed on the EUR/USD forex pair. The US dollar index, which measures the greenback’s performance versus a basket of major peers, rose 0.04% to 99.26 this morning.
The EUR/USD pair edged lower by 0.05% to 1.1626 this morning.
What to watch: Investors will continue monitoring developments related to the US-Iran conflict.
Data on S&P Global Eurozone Composite PMI (1200 UAE Time) and producer price index (1200 UAE Time) will be released today. The S&P Global Eurozone Composite PMI, which fell to 47.5 in May from 48.8 in April, is expected to decline further to 47.5 in June. Eurozone’s PPI, which accelerated to 2.10% in March, is expected to accelerate to 4.8% in April.
Other Markets: US stock indices closed higher on Tuesday, with the Dow Jones index, S&P 500 and Nasdaq up by 0.45%, 0.13% and 0.03%, respectively.
Russia signed a military cooperation agreement with the Taliban, raising concerns around Afghanistan’s ruling group providing support in the war against Ukraine. The news sent the USD/RUB pair lower in forex trading this morning.
The American Petroleum Institute reported that US crude oil inventories contracted by 6.8 million barrels in the week ending May 29. The drawdown being significantly more than market expectations of 3.6 million barrels sent oil prices sharply higher this morning.
Australia’s composite PMI declined to 48.7 in May, from the previous month’s 50.7. However, the figure being revised higher from a preliminary estimate of 47.8 sent the AUD/USD pair higher in forex trading this morning.
Australia’s economy expanded 2.5% year-on-year in the first quarter of 2026, matching the previous quarter’s pace of growth, which sent the S&P/ASX 200 sharply higher this morning.
China’s RatingDog General Composite PMI rose to 54.0 in May, from 53.1 in the previous month. Although this was the highest reading since February, the USD/CNY pair rose in forex trading this morning.
UK’s S&P Global Composite PMI (1230 UAE Time), Turkey’s foreign exchange reserves (1530 UAE Time), Brazil’s industrial production (1600 UAE Time) and S&P Global Composite PMI (1700 UAE Time), Canada’s labour productivity (1630 UAE Time) and S&P Global Composite PMI (1730 UAE Time) as well as US S&P Global Composite PMI (1745 UAE Time), factory orders (1800 UAE Time), ISM Services PMI (1800 UAE Time) and EIA’s crude oil and gasoline stockpile change (1830 UAE Time).
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