(June 15): Japanese and Korean stocks gained after oil prices fell as Donald Trump said the US and Iran will sign a peace deal later this week to reopen the Strait of Hormuz.
South Korea’s Kospi Index rose as much as 5.2% while Japan’s Nikkei 225 Stock Average climbed as much as 3%. The broader Topix index gained as much as 2.3% in Tokyo, lifted by electronics and banks. Oil sank, while the dollar weakened against the yen.
Trump said in a social media post that the Strait of Hormuz would open once the deal is signed on June 19. Iranian state media also said an agreement would be signed, following an announcement from Pakistani Prime Minister Shehbaz Sharif
The unblocking of the Strait of Hormuz would be a major step toward relieving supply chain pressures that have weighed on Asian manufacturers since the conflict broke out. Before the war, Japan relied on the Middle East for more than 90% of its oil imports, and the blockade resulted in production cuts and price hikes across the petrochemical industry.
“In addition to technology shares, buying is also likely to spread to manufacturers and other stocks that have been sold off, helped by lower oil prices,” said Shoji Hirakawa, chief global strategist at Tokai Tokyo Intelligence Lab. While the US-Iran peace deal will help boost the market, there is still uncertainty over the timeline for any arrangements regarding nuclear holdings, he said.
After climbing to a record high in early June, the Nikkei 225 had lost steam in volatile sessions through last week amid shifting Middle East tensions and jitters around overheating in the AI sector.
See also: South Korea's markets chief regrets allowing single-stock leveraged ETFs
Elsewhere, investors will be focused on US and Japan’s central bank decisions this week. With Bank of Japan governor Kazuo Ueda hospitalised, deputy Shinichi Uchida will host a post-meeting press conference Tuesday.
Uploaded by Liza Shireen Koshy
