Global markets remained jittery on Tuesday as political instability in Japan and France, combined with uncertainty over a potential U.S. government shutdown, overshadowed optimism from a major AI chip deal between AMD and OpenAI.
Why It Matters:
Political shifts in major economies and fiscal uncertainty are fueling investor anxiety. Japan’s new ruling party leader, Sanae Takaichi, is expected to favor aggressive spending and easy monetary policy, pushing the yen lower and bond yields higher. Meanwhile, France’s government crisis following PM Sebastien Lecornu’s resignation is pressuring the euro and bond markets.
Markets: Yen slid to a two-month low, euro weakened, and French bond yields rose.
Analysts: Maybank and Macquarie strategists warned that Japan’s fiscal expansion and France’s instability could worsen global volatility.
Governments: Japan’s finance minister pledged to monitor currency fluctuations closely.
What’s Next:
Investors are bracing for continued volatility as the U.S. shutdown drags on. Despite record highs in gold and bitcoin, and the AMD–OpenAI chip deal offering a rare bright spot, global sentiment remains fragile until political clarity returns in Japan, France, and Washington.
With information from Reuters.