TOKYO (AP) — Stock markets throughout Asia experienced dramatic gains during Wednesday morning sessions, while crude oil values tumbled following announcement of a temporary two-week truce between the United States and Iran that will reopen the strategically vital Strait of Hormuz.
Japan’s primary Nikkei 225 index climbed 5.0% to reach 56,106.18 during early market activity. Australia’s S&P/ASX 200 rose 2.6% to 8,952.30. South Korea’s Kospi index experienced a substantial 5.9% increase to 5,819.97. Hong Kong’s Hang Seng index advanced 2.6% to 25,767.42, while Shanghai’s Composite index posted gains of 1.7% to 3,957.55.
U.S. crude oil futures dropped significantly by $16.84 to $96.11 per barrel. International Brent crude fell $14.51 to $94.76 per barrel.
These market movements reflected investor response to the ceasefire announcement, as recent petroleum price increases had directly resulted from the conflict, which had effectively prevented transit through the Strait of Hormuz. A substantial portion of global oil shipments passes through this waterway, including supplies destined for energy-dependent Japan.
“Yet the mood remains one of cautious optimism rather than outright celebration. The ceasefire is only two weeks long, and markets will be watching closely to see whether shipping through the Strait of Hormuz normalizes as promised and whether the fragile truce can pave the way for a more durable peace agreement,” Tim Waterer, chief market analyst at KCM Trade, said.
On Tuesday evening, Trump announced he would postpone his threatened strikes against Iranian infrastructure including bridges, power facilities and other civilian installations. Iran’s foreign minister confirmed that maritime passage through the strait would resume for the following two weeks under Iranian military oversight.
International stock markets have experienced significant volatility in recent weeks following the conflict’s start in late February. Trump’s ultimatum regarding Strait of Hormuz access expired at 8 p.m. Eastern time.
Earlier on Wall Street, trading concluded with gains after Pakistan’s prime minister encouraged Trump to extend his deadline by an additional two weeks while requesting Iran reopen the waterway. The S&P 500 overcame earlier losses to finish with a slight 0.1% increase. The Dow Jones Industrial Average declined 85 points, or 0.2%, while the Nasdaq composite rose 0.1%.
Treasury bond markets saw yields decline on news of the potential ceasefire. The 10-year Treasury yield decreased to 4.24% from Tuesday’s earlier rate of 4.30%.
Currency markets showed the U.S. dollar weakening to 158.54 Japanese yen from Wednesday’s 159.52 yen. The euro strengthened to $1.1671, rising from $1.1597.
