Key Takeaways
- Japan’s Nikkei 225 (JP225) briefly surpassed the 70,000 mark for the first time in history on Tuesday, driven by optimism over a U.S.-Iran peace deal and the reopening of the Strait of Hormuz.
- The Bank of Japan (BOJ) raised its short-term interest rate to 1.0%, its highest level since 1995, as policymakers move to combat inflation and support a volatile yen.
- Novo Nordisk (NVO) is preparing an imminent regulatory filing for its oral weight-loss pill, Wegovy, in China to compete with rival Eli Lilly (LLY) in the world's second-largest pharmaceutical market.
- The Reserve Bank of Australia (RBA) held interest rates steady at 4.35%, with Governor Michele Bullock noting that current oil prices are aligning with the bank's baseline outlook following the Middle East ceasefire.
Nikkei Surges Amid Geopolitical Relief and BOJ Tightening
The Japanese equity market reached a historic milestone on Tuesday as the Nikkei 225 (JP225) briefly touched the 70,000 level before closing at a record high. Investors flooded the market following news of a tentative peace agreement between the United States and Iran, which is expected to restore stability to global energy supplies and reopen the Strait of Hormuz by Friday.
Simultaneously, the Bank of Japan delivered a landmark 25-basis-point rate hike, bringing the benchmark rate to 1.0%. Deputy Governor Shinichi Uchida, filling in for the hospitalized Governor Kazuo Ueda, signaled the bank's commitment to normalization. While the hike initially caused the Nikkei to trim some gains, technology shares like Advantest (6857) and Kioxia led a late-session recovery.
Novo Nordisk Targets China’s Weight-Loss Market
Novo Nordisk (NVO) CEO Mike Doustdar announced on Tuesday that the company will "very soon" file for regulatory approval of its oral Wegovy pill in China. This strategic move aims to challenge Eli Lilly (LLY), which has already made significant inroads in the Chinese market with its own GLP-1 therapies.
The company emphasized that while Wegovy production remains centered in Denmark and the U.S., it continues to evaluate global sites to meet surging demand. Novo Nordisk also confirmed that data protection for semaglutide will remain in place until the second quarter of next year, providing a buffer before potential generic competitors can enter the market.
RBA Holds Rates as Oil Prices Stabilize
In Australia, the Reserve Bank of Australia (RBA) maintained its cash rate at 4.35%, marking a pause after three consecutive hikes earlier this year. Governor Michele Bullock stated that the recent decline in oil prices—triggered by the de-escalation of the Iran conflict—is consistent with the RBA’s internal forecasts.
Despite the hold, Bullock maintained a hawkish bias, warning that inflation remains "too high" and that further tightening cannot be ruled out if price pressures persist. The Australian dollar (AUD) remained under pressure following the announcement, trading near $0.7050.
Cybersecurity and Maritime Safety
Japan’s Finance Minister Satsuki Katayama addressed the status of Claude Mythos, an advanced AI model developed by Anthropic. Katayama confirmed that the government is currently verifying operations for the model, which is being deployed across major financial institutions like MUFG (MUFG) to bolster national cyber defense.
On the diplomatic front, China pledged to continue its role in protecting commercial vessels and crews in the Strait of Hormuz. Chinese officials expressed hope for a rapid resumption of safe passage, noting that the waterway is a critical artery for the country's energy security. Shipping giants like Mitsui O.S.K. Lines (9104) cautioned that it may still take weeks for full-scale maritime traffic to normalize.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.