Asia-Pacific stock markets rallied on Thursday, May 7th, with the Nikkei 225 index breaking the 62,000-point barrier for the first time. Encouraged by optimism surrounding the possibility of a peaceful agreement in the US-Iran conflict, coupled with the resumption of trading after the Golden Week holiday in Japan, the market showed strong momentum as the Nikkei index surged over 2,600 points at one point, marking a nearly 4.5% increase.
The core driver behind this global uptrend stems from the changing situation in the Middle East. US President Trump expressed on the social platform Truth Social that if Tehran accepts the agreement, military action under the codename “Operation Epic Fury” will “come to an end.”
Subsequently, Trump revealed in a media interview that there had been “very good conversations” between Washington and Tehran, stating, “We are very likely to reach an agreement.”
In Japan, after the long holiday break, funds flowed into blue-chip stocks on Thursday’s opening. Electronics, non-ferrous metals, and chemical sectors stood out, with Softbank, a flagship company, seeing a surge of nearly 12%, while semiconductor ABF substrate manufacturer Ibiden achieved a record increase of about 16%. The TOPIX index also rose by 2.37%.
Taiwan’s stock market displayed a robust performance in tandem, opening up by 701.38 points, a 1.70% increase, reaching 41,840.23 points, with the electronics sector shining brightly with a 2.02% gain.
In contrast, the South Korean composite index (KOSPI) showed volatility, initially rising by approximately 1% at the opening but later turning downwards by 0.31%.
Australia’s S&P/ASX 200 index rose by 0.9%.
As the US indicated that if an agreement is reached, the Hormuz Strait would be opened to all countries, including Iran, alleviating pressure in the energy market. Crude oil prices sharply fell below $100 per barrel at one point, with Brent crude oil futures currently stabilizing around $102.
In terms of exchange rates, as safe-haven funds moved away from the US dollar, the yen slightly strengthened against the dollar to around 156.48. Market analysts pointed out that besides geopolitical factors, the psychological expectation of potential currency intervention by Japanese authorities also provided some support for the yen.
This strong rebound in the Asia-Pacific markets closely followed Wall Street’s record-breaking performance the previous night. On Wednesday, the S&P 500 index rose by 1.46% to close at 7,365.12 points, while the Nasdaq Composite index surged by 2.02% to close at 25,838.94 points, both reaching new highs and setting closing records.
The Dow Jones Industrial Average climbed 612.34 points, a 1.24% increase, closing at 49,910.59 points, indicating that investors are currently hopeful for substantive progress stemming from diplomatic negotiations.