Asia caught a broad risk-on bid overnight, but the yen's break above 159 and Wednesday's US CPI are the swing factors for the US open.
Nikkei ripped roughly 2% to fresh highs near 66,970 on continued AI/tech buying, KOSPI added about 0.7% to just above 6,300, and Hong Kong's Hang Seng closed up near 1.1% at 25,937 as mainland sentiment firmed after China's July CPI cooled to just 0.5% year-on-year, the softest print in six months, reviving reflation and stimulus bets that also lifted Shanghai and Shenzhen shares modestly. The same soft-jobs, soft-CPI mix that lit up regional equities hit the dollar everywhere except against itself in Tokyo: USD/JPY pushed through 159 after a recent joint Tokyo-Washington intervention failed to hold the line, leaving the pair in what desks now call an intervention-sensitive zone. USD/CNH sits pinned near 7.15-7.17, trading as a beta play on JPY with the PBOC fixing steady.
US futures are only modestly firmer into the cash open, S&P and Nasdaq contracts up a few tenths of a percent, as the desk squares up ahead of Wednesday's CPI print (consensus +0.1% m/m, 3.4% y/y) and Thursday's PPI. Oil is the wildcard: Brent's push toward 90 on Strait of Hormuz risk is the one input that could turn a soft-CPI relief trade into a stagflation scare, with the 10-year already back above 4.7%. Earnings tape stays constructive, with CoreWeave and Super Micro both jumping double digits overnight on strong prints, keeping AI-infrastructure risk appetite intact.
The risk: a hot CPI print landing alongside a sustained oil bid reprices the soft-landing narrative fast, and any further yen slide toward 160 risks real intervention that could spill volatility into US equities via a yen-carry unwind.