Asian shares experienced an upward trend on Monday, buoyed by U.S. President Donald Trump’s announcement regarding the progress of peace talks aimed at resolving the ongoing conflict with Iran.
In Japan, the Nikkei 225 index rose by 3.1% to reach 65,321.56, while Australia’s S&P/ASX 200 increased by 0.4% to 8,692.70. The Shanghai Composite also saw a modest gain of 0.4%, reaching 4,127.53.
Market Reactions and Trading Conditions
Trading activity was halted in South Korea and Hong Kong due to holidays in observance of Buddha’s birthday. Additionally, U.S. markets remained closed on Monday for Memorial Day.
Trump stated that negotiations with Iran were “proceeding in an orderly and constructive manner.” According to regional officials, the U.S. is nearing an agreement with Iran that could conclude the war, facilitate the reopening of the Strait of Hormuz, and require Iran to relinquish its stockpile of highly enriched uranium.
Impact on Oil Prices
The anticipated reopening of the Strait of Hormuz is expected to influence oil prices significantly. Currently, the closure of the strait has obstructed oil tankers from exiting the Persian Gulf, affecting global crude deliveries. Japan, which imports nearly all of its oil, relies heavily on this strait for its supply.
Analyst Stephen Innes commented, “Markets are rapidly transitioning from pricing geopolitical fear toward pricing a potential peace dividend as Hormuz reopening expectations pressure oil and the dollar lower.”
Current Oil Prices and Currency Trading
As of early Monday, benchmark U.S. crude oil prices fell by $4.35 to $92.25 per barrel, while Brent crude, the international standard, decreased by $4.16 to $99.38 per barrel.
In the currency market, the U.S. dollar weakened against the Japanese yen, declining to 158.80 from 159.16 yen. The euro rose slightly to $1.1641, up from $1.1605.
Wall Street Performance
On Wall Street, stocks concluded their eighth consecutive week of gains, marking the longest winning streak since 2023. This occurred despite a survey indicating that U.S. consumers are increasingly pessimistic about the economy.
The S&P 500 index rose by 0.4%, nearing its all-time high recorded in the previous week. The Dow Jones Industrial Average increased by 0.6%, while the Nasdaq composite gained 0.2%.
Earnings Reports and Bond Yields
Recent earnings reports from U.S. companies exceeding analysts’ expectations have contributed positively to market conditions. However, concerns regarding inflation have resulted in rising bond yields globally.
The yield on the 10-year Treasury note decreased slightly to 4.56% on Friday, down from 4.57% the previous day, yet remains significantly higher than the 3.97% level prior to the onset of the war.