A look at the day ahead in European and global markets from

Ankur Banerjee

Japan's Nikkei returned from holiday and jumped onto the

scorching AI rally, joining South Korea and Taiwan equities at

record peaks, while oil prices hovered near $100 per barrel as

markets held their breath for a deal to end the Middle East war.

The benchmark Nikkei 225 Index soared nearly 6%,

lifting broader Asian gauges to record highs after robust

earnings from tech firms fuelled the AI momentum.

The Nikkei is now up 25% this year but lags Seoul's KOSPI's

eye-watering 75% surge in 2026, the world's

best-performing major stock market which held that crown last

year too. Taiwan stocks have risen 45% this year.

In contrast, the tech-heavy Nasdaq is up 11% in 2026

while the S&P 500 is up nearly 8%. In some ways, Asia is

where the AI boom is showing up this year.

Just this week Samsung Electronics ( SSNLF ) joined

Taiwan's TSMC at the trillion-dollar club. SK Hynix

is not far off.

In currencies, the yen was stable in Asian hours

at 156.35 per U.S. dollar but traders were left screen-watching

as bouts of sudden spikes in the past few sessions spurred

speculation about intervention from Japanese authorities.

Sources told Reuters that Tokyo intervened on Thursday last

week, with money market data suggesting they sold about $35

billion to support the yen. Since then, the market has seen

three abrupt spikes in the yen including on Wednesday, when it

hit a 10-week high of 155 per U.S. dollar.

Japan faces no constraints on how often it can intervene in

currency markets and is in daily contact with U.S. authorities,

its top currency diplomat said on Thursday. Data later in the

day could shed light on whether Tokyo had stepped into the

market.

In the Middle East, Tehran is considering a U.S. peace

proposal that sources said would formally end the conflict while

leaving unresolved key U.S. demands that Iran suspend its

nuclear program and reopen the Strait of Hormuz.

The crucial waterway has been effectively at a standstill

since the war erupted at the end of February, sending oil prices

surging and fanning inflation fears.

While the latest news on a possible peace deal weighed on

oil prices, they remain at around the $100 per barrel level,

well above where they were before the war started. The dollar

too was on the back foot as risk sentiment improved.

Britain's local elections on Thursday are in the spotlight

for global bond investors, wary that a poor showing for the

ruling Labour Party could pave the way to an unwelcome

leadership challenge and renew concerns about fiscal slippage.

Key developments that could influence markets on Thursday:

Economic events: April PMI data for Germany, France, UK

(By Ankur Banerjee; Editing by Muralikumar Anantharaman)