Asian stock markets posted solid gains Friday as investors navigated continued volatility from the Iran conflict, with South Korea's Kospi surging 2.5% and Tokyo's Nikkei 225 climbing 1.2% despite persistent threats to global energy supply chains.
South Korea's benchmark Kospi rose to 7,475.94, clawing back losses from earlier in the week. The rally came even as shares in memory chipmaker SK Hynix, preparing for its debut on the Nasdaq in New York on Friday, slipped 0.3% in Seoul trading.
Technology Stocks Lead Gains
Tokyo's Nikkei 225 reached 68,557.73, driven by strong performances in the technology sector. SoftBank Group, a key investor in OpenAI, jumped 10.7%. Chip equipment maker Tokyo Electron added 2.7%. Hong Kong's Hang Seng traded 0.5% higher at 24,156.29, while the Shanghai Composite index erased earlier losses to fall 1% to 3,996.16.
Australia's S&P/ASX 200 gained 0.5% to 8,806.00. India's Sensex added 1%.
The market resilience comes as tensions between Iran and the U.S. escalated this week. President Donald Trump declared the Iran war ceasefire agreement "over," and the United States and Iran exchanged attacks.
Oil Supply Constraints Persist
Oil prices yo-yoed again Friday as global supplies remained under pressure. A limited number of vessels can cross the Strait of Hormuz, a crucial waterway for energy transport, creating persistent supply concerns.
Brent crude, the international standard, fell 0.8% to $75.66 per barrel. It was trading near $72 a barrel before the war began in late February. Benchmark U.S. crude shed 0.9% to $71.47 a barrel.
The Strait of Hormuz bottleneck represents a significant risk to global energy markets. Limited vessel access through this critical chokepoint continues to constrain oil flows, though prices have stabilized somewhat from earlier volatility.
Currency Movements
In currency trading early Friday, the U.S. dollar fell to 161.70 Japanese yen from 162.37 yen. The euro was trading at $1.1439, up from $1.1430.
The yen gained against the dollar after Finance Minister Satsuki Katayama told a parliamentary committee that the government plans to encourage big pension funds to invest more in domestic, yen-denominated assets. This policy shift signals Japan's intent to strengthen its currency through market-based mechanisms rather than direct intervention.
The mixed signals from global markets reflect investor uncertainty about the Iran conflict's trajectory and its impact on energy supplies. While equity markets have shown resilience, particularly in technology sectors less dependent on energy costs, the ongoing supply constraints in the Strait of Hormuz remain a significant concern for global commerce.
Why This Matters:
The continued disruption to oil flows through the Strait of Hormuz demonstrates the fragility of global energy markets when geopolitical tensions threaten critical infrastructure. With oil prices still elevated compared to pre-war levels in late February, businesses and consumers face sustained pressure from higher energy costs. Japan's move to encourage domestic investment in yen-denominated assets represents a market-oriented approach to currency stability, relying on private pension fund decisions rather than government currency manipulation. The technology sector's strong performance, particularly in AI-related investments like SoftBank's stake in OpenAI, shows how innovation-driven companies can weather geopolitical storms better than energy-dependent industries. However, the Iran conflict's escalation after the collapse of the ceasefire agreement underscores the risks of diplomatic failures and the economic costs of prolonged military tensions in strategically vital regions.