This week, an upside surprise in US CPI strengthened expectations of further Fed rate hikes, sending US rates and the dollar higher. Dollar-yen temporarily rose into the ¥160 range, while AI-related stocks saw divergent performance by company.
Dollar-yen had been stuck in the ¥157-¥158 range through last week, but US rates rose and the dollar strengthened this week following an upside surprise in US inflation data. Dollar-yen consequently surged temporarily into the ¥160 range.
AI-related stocks remain subject to uncertainty. While CoreWeave's earnings prompted a rebound, selling at times spread across semiconductor stocks following a change at the top of NVIDIA's management. Increasing attention is being paid not only to the presence or absence of AI demand, but also to companies' earnings structures, including financing and management risks.
PPI continued to rise month on month while remaining at a high level year on year. Crude oil fell, providing some relief from inflationary pressures, but elevated prices overall persisted and continued to affect the interest-rate environment. Falling crude oil prices and rising interest rates progressed at the same time, producing different market reactions to different factors.
Going forward, US interest rates and the Fed, Japanese interest rates and the Bank of Japan, and fund flows into AI-related stocks are expected to determine the direction of dollar-yen and the equity market. The AI market may be entering a phase of "the beginning of selection."