Japan's Real Wage Growth Increased for Sixth Consecutive Month In June Driven by Higher Summer Bonuses

Japan's indexes rebounded for the second consecutive session amid improving global risk sentiment toward the AI trade. 

The Nikkei 225 Stock Average increased more than 3%, the broader TOPIX advanced 1.7%, and the Japanese yen weakened to 157.45 against the U.S. dollar. 

AI and semiconductor stocks advanced in Tokyo, tracking gains in overnight trading in New York as investors increased exposure to high-flying hyperscalers and tech stocks. 

Japan's Real Wage Growth Streak Extends to Sixth Month In June

Japan's real wages in June increased for the sixth consecutive month in June, reflecting higher government bonuses, according to the Ministry of Health, Labor, and Welfare. 

Nominal wages per worker, including base pay and bonuses, increased 3.4% to 531,677 yen, marking the fifth consecutive month exceeding 3%. 

After adjusting for inflation, real wages rose 1.6%, matching the rate in the previous month as June's inflation accelerated to 1.9% from 1.7% in May. 

The advance in nominal wage was driven by a 3.5% increase in special earnings, mainly bonuses, to 232,455 yen, as labor organizations during "Shunto negotiations" won record increases. 

The Japan Business Federation, the association of large businesses, said on Tuesday it agreed to an average wage increase of 5.37%, exceeding 5% for the third consecutive year. 

In addition, large companies raised summer bonuses by 1.88%, exceeding one million yen for the first time since recordkeeping began in 1981.  

For now, the Bank of Japan has held its short-term rates at 1.0% at the end of its policy meeting last month, and Governor Kazuo Ueda signaled additional rate hikes, citing the yen's weakness and higher cost of imported energy. 

Japan Indexes and Stocks 

The Nikkei 225 Stock Average gained 3.1% to 65,976.88, and the broader TOPIX advanced 1.7% to 4,029.44. 

Semiconductor equipment makers led the gainers in Tokyo amid sustained enthusiasm over the AI trade. 

Tokyo Electron increased 3.5% to ¥58,690.0, Advantest Corp. gained 8.1% to ¥33,530.0, and Kioxia Holdings Corp. jumped 6% to ¥55,200.0. 

Nippon Yusen KK decreased 4.3% to ¥5,764.0, Mitsui OSK Lines dropped 1.9% to ¥5,938.0, and Kawasaki Kisen Kaisha Ltd. eased 6% to ¥2,691.50. 

Japan's Real Wage Growth Increased for Sixth Consecutive Month Driven by Higher Summer Bonuses

Japan's indexes rebounded for the second consecutive session amid improving global risk sentiment toward the AI trade. 

The Nikkei 225 Stock Average increased more than 3%, the broader TOPIX advanced 1.7%, and the Japanese yen weakened to 157.45 against the U.S. dollar. 

AI and semiconductor stocks advanced in Tokyo, tracking gains in overnight trading in New York as investors increased exposure to high-flying hyperscalers and tech stocks. 

Japan's Real Wage Growth Streak Extends to Sixth Month In June

Japan's real wages in June increased for the sixth consecutive month in June, reflecting higher government bonuses, according to the Ministry of Health, Labor, and Welfare. 

Nominal wages per worker, including base pay and bonuses, increased 3.4% to 531,677 yen, marking the fifth consecutive month exceeding 3%. 

After adjusting for inflation, real wages rose 1.6%, matching the rate in the previous month as June's inflation accelerated to 1.9% from 1.7% in May. 

The advance in nominal wage was driven by a 3.5% increase in special earnings, mainly bonuses, to 232,455 yen, as labor organizations during "Shunto negotiations" won record increases. 

The Japan Business Federation, the association of large businesses, said on Tuesday it agreed to an average wage increase of 5.37%, exceeding 5% for the third consecutive year. 

In addition, large companies raised summer bonuses by 1.88%, exceeding one million yen for the first time since recordkeeping began in 1981.  

For now, the Bank of Japan has held its short-term rates at 1.0% at the end of its policy meeting last month, and Governor Kazuo Ueda signaled additional rate hikes, citing the yen's weakness and higher cost of imported energy. 

Japan Indexes and Stocks 

The Nikkei 225 Stock Average gained 3.1% to 65,976.88, and the broader TOPIX advanced 1.7% to 4,029.44. 

Semiconductor equipment makers led the gainers in Tokyo amid sustained enthusiasm over the AI trade. 

Tokyo Electron increased 3.5% to ¥58,690.0, Advantest Corp. gained 8.1% to ¥33,530.0, and Kioxia Holdings Corp. jumped 6% to ¥55,200.0. 

Nippon Yusen KK decreased 4.3% to ¥5,764.0, Mitsui OSK Lines dropped 1.9% to ¥5,938.0, and Kawasaki Kisen Kaisha Ltd. eased 6% to ¥2,691.50. 

China and Asian Markets Extended Weekly Gains Powered by AI Trade

China's stocks advanced on Wednesday, and investors reacted to international events amid uncertain geopolitical tensions. 

The Hang Seng Index increased 0.3%, and the mainland-focused CSI 300 Index advanced 1% as investors surmised cooling tensions in the Middle East may improve energy shipments through the Strait of Hormuz. 

The Brent crude oil price decreased 1.2% to $78.44 a barrel as the U.S. and Iran signaled a willingness to accelerate diplomatic efforts and avoid the immediate repeat of July's string of attacks. 

In overnight trading in New York, the S&P 500 Index jumped 1.8% and the tech-focused Nasdaq Composite advanced 2.6% amid improving global risk sentiment and strong earnings.  

Across Asia, benchmark indexes in Tokyo jumped 3.3% and in Seoul advanced 4.4%, driven by a surge in computer memory makers and semiconductor equipment makers.

In Mumbai, benchmark indexes gained 0.4% and the rupee held stable, following the two-day decline in energy prices, and in Sydney, it edged up 0.3%.

On the economic front, China's service sector growth slowed in July, expanding at the slowest pace since September 2024.

The RatingDog China General Services PMI dropped to 50.4 from 54.1 in June, as input and output prices rose amid higher operating expenses and insurance premiums, said S&P Global.  

China Indexes and Stocks 

The Hang Seng Index increased 0.3% to 25,916.61, and the mainland-focused CSI 300 Index advanced 1% to 4,646.25. 

AI- and semiconductor-linked stocks retained an upward bias in Hong Kong and Shanghai amid expectations of sustained investment in artificial intelligence infrastructure. 

SMIC advanced 4.3% to HK $68.45, Zhongji Innolight declined 7.6% to ¥943.86, and Eoptolink Technology decreased 5.7% to ¥422.43. 

MiniMax Group soared 11.8% to HK $257.40, Z.AI Co. Ltd. increased 7.5% to HK $1,086.00, and CXMT Corp. fell 0.6% to ¥54.70.

China and Asian Markets Extended Weekly Gains Powered by AI Trade

China's stocks advanced on Wednesday, and investors reacted to international events amid uncertain geopolitical tensions. 

The Hang Seng Index increased 0.3%, and the mainland-focused CSI 300 Index advanced 1% as investors surmised cooling tensions in the Middle East may improve energy shipments through the Strait of Hormuz. 

The Brent crude oil price decreased 1.2% to $78.44 a barrel as the U.S. and Iran signaled a willingness to accelerate diplomatic efforts and avoid the immediate repeat of July's string of attacks. 

In overnight trading in New York, the S&P 500 Index jumped 1.8% and the tech-focused Nasdaq Composite advanced 2.6% amid improving global risk sentiment and strong earnings.  

Across Asia, benchmark indexes in Tokyo jumped 3.3% and in Seoul advanced 4.4%, driven by a surge in computer memory makers and semiconductor equipment makers.

In Mumbai, benchmark indexes gained 0.4% and the rupee held stable, following the two-day decline in energy prices, and in Sydney, it edged up 0.3%.

China Indexes and Stocks 

The Hang Seng Index increased 0.3% to 25,916.61, and the mainland-focused CSI 300 Index advanced 1% to 4,646.25. 

AI- and semiconductor-linked stocks retained an upward bias in Hong Kong and Shanghai amid expectations of sustained investment in artificial intelligence infrastructure. 

SMIC advanced 4.3% to HK $68.45, Zhongji Innolight declined 7.6% to ¥943.86, and Eoptolink Technology decreased 5.7% to ¥422.43. 

MiniMax Group soared 11.8% to HK $257.40, Z.AI Co. Ltd. increased 7.5% to HK $1,086.00, and CXMT Corp. fell 0.6% to ¥54.70.

McDonald's Corporation jumped 1.5% to $269.17 after the company released mixed quarterly results as same-store sales in the U.S. slowed. 

Total revenues in the second quarter increased 4% to $7.1 billion from $6.8 billion, net income advanced 4% to $2.36 billion from $2.25 billion, and diluted earnings per share rose to 6% to $3.32 from $3.14 a year ago. 

Global comparable sales increased 1.3%, driven by a 0.8% increase in the U.S., a 1.5% rise in internationally operated markets, and 1.9% in internationally licensed markets. 

Comparable sales across all licensed international locations were positive in all geographic regions, led by Japan and partly offset by negative sales in China. 

Caterpillar Inc. rose 7.6% to $893.70 after the construction and power equipment maker reported better-than-expected second quarter results, driven by power generation demand and data center spending. 

Revenue increased 24% to $20.5 billion from $16.6 billion, net income advanced to $3.6 billion from $2.2 billion, and diluted earnings per share rose to $7.77 from $4.62 a year ago. 

Power generation revenue soared 29% to $3.1 billion from $2.4 billion, oil & gas sales increased 9% to $2.1 billion from $1.9 billion, and industrial sales advanced 9% to $1.7 billion from $1.5 billion a year ago. 

Overall construction division sales soared 35% to $8.3 billion from $6.2 billion, and resource industries sales increased 20% to $4.6 billion from $3.9 billion a year ago. 

 

Chipotle Mexican Grill increased 7.5% to $36.80 after the company released its second quarter results. 

Revenue increased 9.3% to $3.4 billion, net income decreased to $403.5 million from $436.1 million, and diluted earnings per share were flat at 32 cents. 

Comparable restaurant sales increased 2.2%, and the company opened 100 new locations across its system. 

Microsoft jumped 9.7% to $428.28 after the software company reported its quarterly results. 

Revenue for the fiscal fourth quarter ending in June increased 18% to $90.1 billion, net income surged 31% to $35.8 billion, and diluted earnings per share advanced to 

Total cloud revenue surged 27% to $59.3 billion, driven by a 43% increase in Azure and other cloud services revenue, pushing Azure's individual annual revenue past $100 billion for the first time. 

Spending on data centers and AI infrastructure came in at about $41 billion, and the company indicated it plans to continue to invest in extending its infrastructure. 

Microsoft guided fiscal first quarter revenue to range between $89.85 billion and $90.95 billion, indicating about 16% growth at the midpoint. 

Meta Platforms dropped 10% to $526.52 after the company reported second-quarter results. 

Total revenue increased 28% to $60.8 billion, net income decreased 14% to $15.8 billion from $18.3 billion, and diluted earnings per share declined 13% to $6.18 from $7.14 a year ago. 

Meta's free cash flow plunged 91% to $784 million from $8.6 billion a year ago, largely because of the escalating cost of artificial infrastructure.

Capital expenditures soared to $31.1 billion for the quarter, consuming roughly 98% of Meta’s operating cash flow to build out server clusters and new data centers like its $14 billion El Paso, Texas, venture.

Daily Active People users averaged 3.60 billion across its family of apps—Facebook, Instagram, WhatsApp, and Threads—an increase of 3%.

Meta projected third quarter revenue between $61 billion and $64 billion, setting a midpoint ($62.5 billion) slightly below consensus expectations of $63.15 billion.

Visa Inc. decreased 2.4% to $358.0 after the payment processor reported its fiscal third quarter ending in June. 

Revenue increased 14% to $11.6 billion from $10.2 billion, net income advanced 7% to $5.6 billion from $5.3 billion, and diluted earnings per share rose 10% to $2.97 from $2.69 a year ago. 

Total revenue growth was driven by an 11% increase in payments and 9% growth in processed transactions, led by expansion in digital commerce.

The company said it returned $6.2 billion to shareholders, including $4.9 billion in stock repurchases and $1.3 billion in dividends, and as of the end of June, about $28.4 billion was available under stock repurchase authorization. 

The U.S. payment volume increased 10%, driven by an 11% rise in credit volume, a 9% increase in debit charges, and international payments advanced 10% from a year ago, respectively. 

The FIFA World Cup also supported a surge in cross-border payment processing, and inbound processing rose 25% in the U.S. host cities, 70% in Mexico, and 35% in Canada. 

Visa estimated fourth-quarter adjusted net revenue growth at the high end of the "low-double-digit percentage range," full-year 2026 net revenue growth at the low end of the low-teens percentage range, and adjusted earnings per share growth at the low end of the mid-teens percentage range. 

U.S. Indexes Advanced Towards Record Highs as Earnings Roll In

Stocks in New York extended their 2-day gains as improving global risk sentiment and upbeat corporate earnings outweighed a rebound in oil prices. 

The S&P 500 Index increased 0.2%, and the Nasdaq Composite advanced 0.4% as investors favored AI- and semiconductor-linked stocks. 

Market sentiment remained positive as leading tech companies signaled their commitment to continue to invest in artificial intelligence infrastructure. 

Nvidia, AMD, Intel, SanDisk, Micron Technology, and Applied Materials advanced between 5% and 10% over the two trading sessions and extended their gains in Tuesday's trading. 

After the close of the regular trading session, AMD, McDonald's, Caterpillar, and SpaceX are scheduled to report their quarterly results. 

In Monday's trading, the S&P 500 Index advanced 1.3%, and the tech-focused Nasdaq Composite gained 2.1%. supporting the higher openings in Asia on Tuesday. 

However, benchmark indexes in Japan struggled to advance amid worries that the stronger yen could weaken earnings growth for export-driven companies.   Indexes in China closed mixed as investors focused on the weakening macroeconomic backdrop, despite resilient exports and an improving outlook for leading AI-related and semiconductor-related stocks. 

In Europe, the DAX index increased 0.4% in Frankfurt, the CAC-40 index fell 0.02%, and the FTSE 100 index inched higher by 0.35%. 

U.S. Movers 

Palantir Technologies soared 17% to $147.16 after the AI and data analytics company reported a 93% rise in revenue from a year ago in its latest quarter. 

Deutsche Lufthansa AG decreased 10.8% to €8.22 after the German state-controlled airline reported a 56% drop in core profit in the second quarter because of a labor strike and a sharp jump in jet fuel costs. 

Lufthansa said revenue rose 8% to €11.1 billion, and adjusted operating earnings dropped to €383 billion from €870 million a year ago.  

Caterpillar Inc. rose 7.6% to $893.70 after the construction and power equipment maker reported better-than-expected second quarter results, driven by power generation demand and data center spending. 

Revenue increased 24% to $20.5 billion from $16.6 billion, net income advanced to $3.6 billion from $2.2 billion, and diluted earnings per share rose to $7.77 from $4.62 a year ago. 

Power generation revenue soared 29% to $3.1 billion from $2.4 billion, oil & gas sales increased 9% to $2.1 billion from $1.9 billion, and industrial sales advanced 9% to $1.7 billion from $1.5 billion a year ago. 

Overall construction division sales soared 35% to $8.3 billion from $6.2 billion, and resource industries sales increased 20% to $4.6 billion from $3.9 billion a year ago. 

McDonald's Corporation jumped 1.5% to $269.17 after the company released mixed quarterly results as same-store sales in the U.S. slowed. 

Total revenues in the second quarter increased 4% to $7.1 billion from $6.8 billion, net income advanced 4% to $2.36 billion from $2.25 billion, and diluted earnings per share rose to 6% to $3.32 from $3.14 a year ago. 

Global comparable sales increased 1.3%, driven by a 0.8% increase in the U.S., a 1.5% rise in internationally operated markets, and 1.9% in internationally licensed markets. 

Comparable sales across all licensed international locations were positive in all geographic regions, led by Japan and partly offset by negative sales in China. 

U.S. Indexes Advanced Towards Record Highs as Earnings Roll In

Stocks in New York extended their 2-day gains as improving global risk sentiment and upbeat corporate earnings outweighed a rebound in oil prices. 

The S&P 500 Index increased 0.2%, and the Nasdaq Composite advanced 0.4% as investors favored AI- and semiconductor-linked stocks. 

Market sentiment remained positive as leading tech companies signaled their commitment to continue to invest in artificial intelligence infrastructure. 

Nvidia, AMD, Intel, SanDisk, Micron Technology, and Applied Materials advanced between 5% and 10% over the two trading sessions and extended their gains in Tuesday's trading. 

After the close of the regular trading session, AMD, McDonald's, Caterpillar, and SpaceX are scheduled to report their quarterly results. 

In Monday's trading, the S&P 500 Index advanced 1.3%, and the tech-focused Nasdaq Composite gained 2.1%. supporting the higher openings in Asia on Tuesday. 

However, benchmark indexes in Japan struggled to advance amid worries that the stronger yen could weaken earnings growth for export-driven companies.   Indexes in China closed mixed as investors focused on the weakening macroeconomic backdrop, despite resilient exports and an improving outlook for leading AI-related and semiconductor-related stocks. 

In Europe, the DAX index increased 0.4% in Frankfurt, the CAC-40 index fell 0.02%, and the FTSE 100 index inched higher by 0.35%. 

U.S. Movers 

Palantir Technologies soared 17% to $147.16 after the AI and data analytics company reported a 93% rise in revenue from a year ago in its latest quarter. 

Deutsche Lufthansa AG decreased 10.8% to €8.22 after the German state-controlled airline reported a 56% drop in core profit in the second quarter because of a labor strike and a sharp jump in jet fuel costs. 

Lufthansa said revenue rose 8% to €11.1 billion, and adjusted operating earnings dropped to €383 billion from €870 million a year ago.  

Caterpillar Inc. rose 7.6% to $893.70 after the construction and power equipment maker reported better-than-expected second quarter results, driven by power generation demand and data center spending. 

Revenue increased 24% to $20.5 billion from $16.6 billion, net income advanced to $3.6 billion from $2.2 billion, and diluted earnings per share rose to $7.77 from $4.62 a year ago. 

Power generation revenue soared 29% to $3.1 billion from $2.4 billion, oil & gas sales increased 9% to $2.1 billion from $1.9 billion, and industrial sales advanced 9% to $1.7 billion from $1.5 billion a year ago. 

Overall construction division sales soared 35% to $8.3 billion from $6.2 billion, and resource industries sales increased 20% to $4.6 billion from $3.9 billion a year ago. 

India Update

Stocks in Mumbai lacked direction amid geopolitical uncertainty, and investors reacted to corporate earnings. 

The BSE Sensex 30 Index increased 0.2%, the Nifty 50 Index decreased 0.6%, and the rupee traded around 95.43 against the U.S. dollar. 

India Indexes and Stocks

The BSE Sensex 30 index increased 0.2% to 78,805.05, and the Nifty 50 Index decreased 0.6% to 24,619.15.