Yen Surges as Wall Street Rallies on AI Optimism

Wall Street experienced a strong rally on Thursday, driven by renewed optimism around artificial intelligence (AI). Microsoft shares surged 15.5%, boosting the Nasdaq and SOX index amid investor excitement around AI profits.

The rally came despite higher bond yields following Fed Chairman Kevin Warsh's comments on inflation. The long-term yields hit multi-year highs, reflecting bond market skepticism about the Fed's clarity on inflation strategy.

In the foreign exchange market, the Japanese yen strengthened sharply against the US dollar, surging nearly 3% on suspected intervention from Japanese authorities.

Markets were unimpressed with Warsh's comments, citing a lack of clarity and questioning the Fed's commitment to its 2% inflation target. Analysts await further signals from the Bank of Japan to determine the effectiveness of the yen intervention.