Morning brief: Asian stocks rise on Japan election bets; Silver, BTC hit highs

Asian markets advanced on Wednesday, led by a rally in Japanese shares, as investors positioned for the possibility of fresh fiscal stimulus in Japan and digested a complex mix of geopolitical risks, central bank concerns, and shifting currency dynamics.

At the same time, cryptocurrencies climbed, precious metals surged to record levels, and corporate dealmaking remained in focus with new developments around Netflix and Warner Bros. Discovery.

Asian markets and currency moves

Asian equities edged higher, supported by gains in Japan, where local media reported that Prime Minister Sanae Takaichi may call a snap lower house election on February 8.

The prospect of an election and additional fiscal stimulus weakened the yen and boosted stocks.

The Japanese yen slid to 159.44 per dollar, its weakest level since July 2024, reviving concerns about possible market intervention.

The softer currency and stimulus expectations lifted the Nikkei more than 1.3% to a record high, while Japanese government bonds fell in what investors have dubbed the “Takaichi trade.”

Masahiko Loo, senior fixed income strategist at State Street Investment Management, said in a Reuters report that the moves reflected expectations of fiscal easing, though he cautioned they could be overstated.

“Any sharp and decisive break beyond 161 level (for yen) could trigger renewed intervention to curb excessive volatility,” Loo said.

Elsewhere, MSCI’s broadest Asia-Pacific index rose 0.2%, hovering just below a record peak.

The CSI 300 index was down 0.74% at the time of writing.

S&P 500 futures were down 0.22%, dragged down by financial shares, while European futures pointed to a muted open.

Bitcoin and crypto markets

Bitcoin climbed to a two-month high as geopolitical uncertainty and concerns around US institutions boosted its appeal.

The world’s largest cryptocurrency rose as much as 2.4% to $96,348 in early Asian trading, its highest intraday level since Nov. 16, although it was trading at $94,751 at the end of writing.

Ether surged as much as 5.1%.

“Medium term, I think we could see investors allocate more to Bitcoin on a gold-catch-up narrative — and other risk-on assets are having a great time,” said Justin d’Anethan, head of research at Arctic Digital, in a Bloomberg report.

Vincent Liu, chief investment officer at Kronos Research, pointed to derivatives markets as another driver, citing “a sharp short squeeze,” with about $270 million of Bitcoin short positions liquidated in the past 24 hours.

Joshua Lim of FalconX said traders broadly see the current macro backdrop as supportive for Bitcoin.

Netflix to increase bid for WBD deal

In corporate news, Netflix Inc. is working on revised terms for its acquisition of Warner Bros. Discovery Inc., including discussions around a potential all-cash offer for the company’s studios and streaming businesses, reported Bloomberg.

The changes aim to speed up a transaction that has faced political opposition and rival bids from Paramount Skydance Corp.

Under the original terms, Warner Bros. shareholders were set to receive $23.25 in cash and $4.50 in Netflix common stock, subject to adjustments if Netflix shares fell below $97.91.

Since Netflix launched its bid for Warner Bros. in October, the streaming company’s shares have declined by about 25%, touching a low of $89.07 in New York trading on Tuesday.

Netflix has already secured $59 billion in bridge financing and refinanced about $25 billion with longer-term debt.

Netflix has room to take on additional debt while preserving its “robust” credit ratings, according to Stephen Flynn, a senior credit analyst at Bloomberg Intelligence, in a research note published on Tuesday.

Silver and gold hit new records

Precious metals surged as geopolitical tensions, US rate expectations, and concerns about Federal Reserve independence fueled haven demand.

Gold rose within striking distance of a record high, while silver broke above $90 an ounce for the first time.

Silver climbed as much as 5.3% to $91.5535 an ounce, with Citigroup upgrading its three-month forecast to $100 an ounce.

Hao Hong of Lotus Asset Management said the rally “has a lot of room to run this year.”

Gold also benefited from strong inflows, with analysts noting sustained speculative interest across global markets.

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