Bloomberg Daybreak: Asia Edition Asia Stocks Rise on Wall Street AI Optimism, Fed Cut Bets
20 snips
Oct 29, 2025 
In this discussion, Mark Cranfield, a Bloomberg MLive strategist, sheds light on Japan's economic policy and the yen's response to U.S. Treasury comments. He explores the concentrated gains in Japanese equities driven by AI, alongside the impact of Fed policy. Joining him, Scott Ladner, Chief Investment Officer at Horizon, analyzes NVIDIA's influence on AI investment and argues that AI may herald a productivity boom rather than a bubble. They also delve into credit market dynamics and the implications of a potential Fed rate cut.
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US Pressure On BOJ Shifts FX And Yields
- Scott Bessent urged Japan to give the BOJ room to fight inflation, pushing yen strength and higher Japanese yields.
- Mark Cranfield says markets see this as a cue for Governor Ueda to prepare for rate hikes before year-end.
Narrow Tech Leadership Masks Market Fragility
- Japanese equity gains are narrowly concentrated in megatech names, mirroring the US AI-driven rally led by Nvidia.
- Cranfield warns the Nikkei's narrow breadth makes the rally vulnerable to a sharp reversal.
Diverging Central Banks Could Push USD/JPY Down
- Opposing central bank directions — Fed easing and a hawkish BOJ — would likely drive dollar/yen lower.
- Cranfield says traders will sell dollars for yen if BOJ signals hikes while the Fed stays dovish.