Japanese shares rally at open, gold nears $4,000

Japanese shares rallied for a second day following the election of a pro-stimulus lawmaker as the country’s next leader.

The Nikkei index gained 1% at the open to a new all-time high, following a 4.8% jump on Monday. US stocks closed at a record after Advanced Micro Devices Inc.’s blockbuster deal with OpenAI helped fuel a rally in chipmakers. The yen held its biggest drop in almost five months ahead of Tuesday’s government bond auction. Gold pushed closer to $4,000 an ounce.

US equity-index futures held their losses after President Donald Trump called on the Democrats to reopen the government before there can be talks on healthcare.

Technology stocks have been powering a global equity rally with Monday’s AMD deal being the latest big-budget data center agreement this year. It follows last month’s announcement that Nvidia Corp. was planning to invest as much as $100 billion in OpenAI amid demand for tools like ChatGPT and the computing power needed to make them run.

“Semiconductors are ‘on fire’,” said Louis Navellier at Navellier & Associates. “The AI narrative continues to gain momentum.”

Still, for almost as long as the artificial intelligence boom has been in full swing, there have also been warnings of a speculative bubble that could rival the dot-com craze of the late 1990s.

Tech firms are spending hundreds of billions of dollars on advanced chips and data centers, and the final bill may run into the trillions.

The financing is coming from venture capital, debt and, lately, some more unconventional arrangements that have raised eyebrows on Wall Street.

Japanese stocks surged on Monday amid hopes of more fiscal spending. Options traders are the least bullish on the yen in more than three years after pro-stimulus lawmaker Sanae Takaichi’s near-certain ascent to become the next prime minister.

The yen slid past 150 a dollar and sank to an all-time low against the euro, while longer-term bonds fell on concern her policies will require more government spending and fan inflation.

Traders are also bracing for an auction of 30-year government bonds in the country after Takaichi’s victory sent shock waves through the debt market. The Ministry of Finance’s sale on Tuesday comes a day after the lawmaker’s victory drove up longer-tenor yields, raising the stakes for the government’s first offering of debt since the vote.

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