European stock markets opened modestly higher on Tuesday as investors digested the impact of last week’s joint US-Japan currency intervention and monitored developments in global oil markets following a strong rally on Wall Street.
France’s CAC 40, Germany’s DAX and the UK’s FTSE 100 all traded in positive territory at the opening bell, extending cautious optimism after easing oil prices helped lift US equities in the previous session.
Market participants are also focused on a busy week of corporate earnings, while continuing to assess whether coordinated action by the United States and Japan can provide lasting support for the Japanese yen.
Japan’s Nikkei 225 fell 0.3% to 63,585.58. The US dollar rose slightly to 157.51 yen from 157.18 yen, while the euro was little changed at $1.1511. Before authorities intervened, the dollar had climbed to around the 160-yen level, pushing the Japanese currency close to its weakest point in nearly four decades.
Analysts said the intervention sent a strong message to currency markets but questioned whether it could produce a sustained recovery without broader economic changes. Inflation trends, interest rate differences and the relative strength of national economies continue to play a central role in determining exchange rates.
BMI, a research unit of Fitch Solutions, said a coordinated operation backed by the United States carries greater influence than Japan acting alone and could discourage speculative trading. It added, however, that any US involvement is likely to remain limited in scale.
Matthew Ryan, head of market strategy at global financial services firm Ebury, said the latest intervention appeared more significant because it suggested a shift in monetary policy rather than a one-off effort to defend the currency. He said the move strengthened confidence in a more positive outlook for the yen.
Trading across the Asia-Pacific region was mixed. South Korea’s Kospi dropped 1.3% to 6,174.72, while Australia’s S&P/ASX 200 gained 1.2% to 9,129.00. Hong Kong’s Hang Seng declined 0.5% to 25,881.99, and China’s Shanghai Composite added 0.2% to close at 3,802.61.
Technology stocks, particularly semiconductor companies, continued to experience sharp swings as investors debated whether rapid revenue growth linked to artificial intelligence can be sustained over the longer term.
On Wall Street, US stocks posted strong gains on Monday as lower oil prices eased inflation concerns. The S&P 500 climbed 1.5%, finishing just below its record high. The Dow Jones Industrial Average rose 693 points, or 1.3%, to reach a new all-time high, while the Nasdaq Composite advanced 2.1%.
Oil prices recovered in early Asian trading after a sharp decline the previous day. US benchmark crude rose 84 cents to $81.18 a barrel, while Brent crude increased $1.15 to $84.92. Prices had fallen more than 5% on Monday after US President Donald Trump said he had postponed new strikes against Iran following appeals from regional allies.
The yield on the benchmark 10-year US Treasury note fell to 4.68% from 4.75% at the end of last week, though it remained well above levels seen before tensions involving Iran escalated.
