Rising US Stocks and Japanese Interest Rates: Markets on High Alert

All three major US stock index futures rose ahead of Tuesday's market open, according to pre-market data. The Dow Jones futures were up 0.06%, S&P 500 index futures were up 0.17%, and Nasdaq futures were up 0.33%.

The Bank of Japan may raise interest rates in September to address inflation risks, following a rate hike in June. This move could be driven by factors such as surging AI-related demand, significant yen depreciation, and rising oil prices.

U.S. Treasury Secretary Scott Benzent recommended unlimited measures to help Japan save the yen, but his actual firepower is limited, with less than $220 billion available in the foreign exchange stabilization fund. The USD/JPY rate hovers around 159 per dollar.