Tech lifts Asian shares as oil slides; yen soft amid intervention watch

Asian share markets drifted higher on Monday, with technology stocks leading the advance as demand for artificial intelligence continued to support chipmakers. Trading was subdued, however, with Japanese markets closed for the Silver Week holiday through Wednesday.

South Korea's technology-heavy index climbed 1.5%, while the broadest gauge of Asia-Pacific shares outside Japan added 0.8%. Chinese blue chips gained 0.6%. Wall Street futures pointed to a firmer open, with S&P 500 contracts up 0.4% and Nasdaq futures 0.6% higher. European futures also edged up, with EUROSTOXX 50 and DAX contracts each rising 0.4% and FTSE futures up 0.2%.

The dollar traded at 156.67 yen, staying on the back foot as investors remained alert to the possibility that Japanese authorities could step into the market during the holiday-thinned session. The yen had jumped on Friday after rate checks in the currency market were reported.

Bond markets stayed edgy following a sharp selloff that pushed the two-year US Treasury yield up 36 basis points over two weeks to 4.7604%, a level last seen in mid-2024. Hawkish guidance from the Federal Reserve last week left futures pricing a 56% chance of another rate increase in October, with a move by year-end viewed as all but certain. Analysts expect two more hikes, in October and December, citing strong nominal consumer spending.

Other central banks, including those in the EU, UK, Japan, Australia and New Zealand, are also expected to tighten further by year-end. The Swiss National Bank, Sweden's Riksbank and Norges Bank meet on Thursday but are seen holding policy steady for now.

Deficit concerns continued to weigh on bonds, with the risk premium on French debt widening on Friday to its highest since the euro zone debt crisis. German debt could face pressure after Chancellor Friedrich Merz's conservative party recorded its weakest election result since 1949. The euro was little changed at $1.1480 after losing nearly 1% last week.

Oil prices fell even as Iran and the United States exchanged fresh threats and after an attack by the Houthis on Saudi Arabia's capital. Brent dropped 2.1% to $101.63 a barrel, while US crude lost 2.1% to $98.15. Data from analytics firm Kpler showed exports from Saudi Arabia, the OPEC kingpin, had recovered to just over 4 million barrels per day so far in September, up from 2.4 million bpd in August, the lowest since at least 2013. A US military commander said the volume of crude, cargo and liquefied natural gas moving in the past two weeks was the highest in six months. Reports also suggested Saudi Arabia aimed to quickly restart some flows through its main east-to-west pipeline after damage from attacks last week, though details were scarce.

A commodities strategist warned that the pipeline closure had materially changed the oil market, estimating global inventories could deplete in five to ten weeks, compared with 15 to 20 weeks a fortnight ago. That could increase pressure on Washington to reach a deal with Iran to keep key shipping routes open.

US President Donald Trump is due to attend the United Nations General Assembly this week ahead of a meeting with Chinese President Xi Jinping on Thursday. US Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng concluded talks in New York on Sunday, with the US proposing a new AI safety notification mechanism for the leaders to consider.

Gold was flat at $4,380 an ounce, held back by higher bond yields.