Nvidia Q3 Earnings Surge Fuels U.S. Stocks; Yen Weakens Further

BREAKING: Nvidia’s earnings report has just sent shockwaves through the markets, with shares surging over 5% in late trading after a robust Q3 performance that exceeded expectations. U.S. equities finished the day modestly higher, driven by strong gains in the tech sector. Investors are reacting positively to Nvidia’s impressive results, which were released after the market closed.

The sentiment shift has affected foreign exchange markets unevenly. While both the AUD and NZD have firmed, the EUR and GBP struggled to keep pace. Notably, the JPY remains a significant underperformer, with the Bank of Japan’s Toyoaki Koeda signaling the urgent need for policy normalization and potential interest rate hikes to combat inflation pressures.

Earlier today, Koeda stated that underlying inflation is now hovering around 2%, fueled by tight labor-market conditions. Despite holding rates steady at 0.5% during her tenure, her latest remarks suggest a growing likelihood of a rate increase in December. However, the yen has shown little resilience, weakening further against major currencies.

In Japan, government bonds are taking a hit, with long-end yields reaching new highs amid rising fiscal concerns and yen depreciation. Chief Cabinet Secretary Kihara expressed alarm over recent currency movements, labeling them as “sharp, one-sided,” and pointed out the risks posed by speculative trading. Yet, even these strong warnings have failed to bolster the JPY.

Meanwhile, in Australia, the Reserve Bank of Australia’s Sarah Hunter announced that recent inflation data has rendered previous forecasts obsolete. She indicated that sustained above-trend growth could trigger new inflation pressures, prompting a reassessment of the RBA’s easing bias after three rate cuts this year.

In a significant move, the People’s Bank of China (PBoC) has maintained its Loan Prime Rates at 3.0% for one-year loans and 3.5% for five-year loans for the sixth consecutive month, emphasizing a steady policy amid fluctuating credit demand.

As this news wrap is finalized, Bloomberg reports that the White House is actively urging Congress to reject proposed legislation that would impose stricter limits on Nvidia’s advanced-chip exports to China and other foreign buyers. This development could have substantial implications for the tech industry and international trade.

Investors will be closely monitoring these evolving situations, particularly the potential effects of Nvidia’s strong earnings and the ongoing challenges facing the yen and global currencies. Stay tuned for further updates as this story develops.