Asian Markets Mostly Higher Amid Trump's Iran Ultimatum
Asian shares traded predominantly higher on Tuesday, exhibiting cautious optimism as oil prices continued their upward trajectory. This surge comes ahead of a critical deadline set by U.S. President Donald Trump, demanding Iran fully reopen the Strait of Hormuz to all shipping traffic. Failure to comply risks military strikes on Iran's power plants and bridges, escalating tensions in the region.
Regional Stock Performance
Key Asian indices showed modest gains. Japan's benchmark Nikkei 225 edged up less than 0.1%, closing at 53,429.56. Australia's S&P/ASX 200 rose more significantly by 1.7% to 8,728.80. South Korea's Kospi advanced 0.8% to 5,494.78, while the Shanghai Composite inched up 0.3% to 3,890.16. Trading was suspended in Hong Kong due to a public holiday.
Wall Street and Global Market Context
On Wall Street, stock prices also drifted higher, with the S&P 500 rising 0.4%, marking a recovery from its recent losing streak. The Dow Jones Industrial Average added 165 points, or 0.4%, and the Nasdaq composite climbed 0.5%. In total, the S&P 500 increased by 29.14 points to 6,611.83, the Dow gained 165.21 to 46,669.88, and the Nasdaq rose 117.16 to 21,996.34.
Oil Price Volatility and Geopolitical Tensions
In energy trading, benchmark U.S. crude oil jumped $2.41 to $114.82 per barrel. Brent crude, the international standard, added $1.46 to $111.23 per barrel. These prices remain substantially above the pre-war level of approximately $70, reflecting ongoing uncertainty. Oil prices have been fluctuating due to the unpredictable nature of the conflict with Iran and its impact on global oil and natural gas flows.
Iran rejected the latest ceasefire proposal on Monday, instead calling for a permanent end to hostilities. Concurrently, Iranian and Omani officials are negotiating a mechanism to administer the Strait of Hormuz, a critical waterway through which a fifth of the world's oil is shipped during peacetime. Iran's control over the strait has significantly disrupted the global economy.
Expert Analysis and Financial Indicators
The Mizuho Daily report from Mizuho Bank's research team in Singapore highlighted that Trump's actions represent "an escalation cycle that has now been extended several times since his first ultimatum in late March." The report noted, "Given the differing perspectives, hopes of a complete resolution to the conflict remains elusive while countries continue to work on bilateral solutions."
In the bond market, Treasury yields remained relatively stable, with the 10-year Treasury yield at 4.33%, still well above its pre-war level of 3.97%. Currency trading saw the U.S. dollar edge up to 159.86 Japanese yen from 159.62 yen, while the euro slightly decreased to $1.1541 from $1.1543.
This article is based on reporting by Yuri Kageyama.
