Asian Markets Retreat Amid Oil Price Drop and Yen Strengthening
Following Donald Trump's announcement to cancel an attack on Iran, oil prices fell by over 5%. Asian stock markets are experiencing a negative trend, while the Japanese yen has strengthened following a coordinated intervention by Tokyo and Washington.
Following Donald Trump's announcement regarding the cancellation of the attack on Iran, Brent crude is down 5% to $83.6 per barrel, and WTI is falling by 5.6% to $79.9 per barrel. The Nikkei index is down 1.7% following a joint move by Japan and the USA to strengthen the yen. The KOSPI index weakened by 4%, and the Hang Seng is down 0.1%.
The negative trend at the opening of the trading week in Asia follows sharp declines in oil prices. President Donald Trump announced yesterday that he decided to cancel an attack against Iran after receiving a request from Tehran and other Middle Eastern countries to refrain from the move, with the aim of promoting an agreement.
The Japanese Ministry of Finance confirmed today that it carried out a coordinated intervention in the foreign exchange market on Friday together with the US Department of the Treasury—a rare move in which the two allies acted together to curb the retreat in the Japanese currency. Tokyo signaled that it is prepared to intervene again if necessary.
"We will not hesitate to carry out additional coordinated interventions in the future," the ministry stated, noting it continues to maintain close contact with its counterparts in the US Department of the Treasury.
The Japanese yen, which weakened last Thursday to 163.73 yen per dollar, strengthened on Friday to 157.57 yen per dollar following the intervention. This morning, the pair is trading at 156.5 yen per dollar.
Japanese exporters are losing ground: Nippon Electric Glass is plummeting by 18% after disappointing reports, while Sumitomo Electric and Mitsubishi Electric are down by 8% and 7.4% respectively. Among Japanese automakers: Toyota is weakening by 4.6%, Nissan is down 3.3%, Honda is losing 4.3%, Mazda is down 3.5%, and Suzuki is falling by 7%.
In the banking sector, Nomura and Mitsubishi Financial are down 2.7%, and Mizuho Financial is down 3%. Conversely, chip stocks are performing well: Renesas is jumping by 13.3%, Lasertec is soaring by 8.7%, and Kioxia is up 6.7%. This contrasts with the trend in Seoul, where Korean chip giants Samsung and SK Hynix are falling by 7.5% and 7.2% respectively.
In Hong Kong, Alibaba is jumping by 5.7%. According to a Bloomberg report, the Chinese AI company Moonshot AI developed its AI models using a cluster of 20,000 Nvidia processors supplied by Alibaba. The report strengthened the assessment that Alibaba is becoming a central supplier of AI infrastructure in China.
