Precise Investors Editorial Team
Nikkei gained 1.9%, while South Korea’s market rose 2.6%
Asian share markets swung higher on Monday as Iranian negotiators said progress had been made in peace talks with the U.S., helping calm fears the process was breaking down.
The talks had been overshadowed by Tehran’s announcement it had again closed the Strait of Hormuz, with tracking sites showing fewer vessels transiting after 32 ships made the passage on Friday and 26 on Saturday.
The news saw Brent crude futures shed early gains to ease 0.4% to $80.17 a barrel, far away from its May high of $126.41.
Nikkei gained 1.9%, having jumped nearly 8% last week to all-time highs. South Korea’s market rose another 2.6%, after soaring more than 11% last week on demand for semiconductor stocks.
Elsewhere, U.S. Treasuries remained under pressure following a hawkish turn by the country’s central bank last week that led markets to price in a 75% chance of a rate hike as early as September.
Futures imply 38 basis points of tightening by year-end, while yields on 2-year notes added as much as 4 basis points to the highest since early 2025 at 4.2276%.
Our baseline call is for patience and a first hike in the second half of 2027, but believe the margin for error and the tolerance for further inflation is limited, with genuine risks of earlier hikes, said Fabio Bassi, head of cross-asset strategy at JPMorgan.
We remain constructive on risk assets as improving labour markets will keep rates higher for longer, supporting a narrow leadership in Quality Growth, Large Cap and Tech, he added. We see upside risks for the S&P target tilted towards 8,000.
The central bank’s hawkish outlook kept the dollar supported at 161.48 yen, with only the threat of Japanese intervention preventing a test of resistance at 161.96, a top from mid-2024.
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