US-Iran Ceasefire Lifts Nikkei, Japanese Markets Reversal
Japanese stocks rallied sharply after the United States and Iran agreed to a two-week ceasefire that is expected to halt the US-Israel military campaign, in exchange for Tehran reopening the Strait of Hormuz. This development boosted risk sentiment, as the market assessed the likelihood of conflict escalation and energy disruptions as easing, albeit temporarily.
In trading Wednesday (April 8) morning in Tokyo, the Topix rose 3.3% to 3,773.70 (9:06 a.m. local time), while the Nikkei jumped 4.1% to 55,624.89. The gains were broad-based: of the 1,652 Topix stocks, 1,514 rose, 39 fell, and 99 remained unchanged, reflecting strengthening risk appetite across sectors.
Mitsubishi UFJ Financial Group Inc. was the largest contributor to the Topix's gains, rising 3.9%. In the foreign exchange market, the yen strengthened against the US dollar after the postponement of the attacks, in line with investors' shift from defensive assets to riskier assets in the region, while also responding to the changing direction of geopolitical news.
Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management, considered Trump's stated requirement for the Strait of Hormuz to be a ceasefire condition "surprising." Although the pause in attacks was only two weeks, he said the move still clearly boosted investor sentiment by reducing the short-term uncertainty that had previously weighed on the market.
Kazunori Tatebe of Daiwa Asset Management added that the two-week deadline raised market expectations that concrete developments could emerge within that period. He believes focus could potentially return to cyclical sectors, artificial intelligence themes, and non-ferrous metals, which have been under pressure since the Iran conflict. Regionally, the MSCI AC Asia Pacific rose 2.4%; the Topix recorded an 11% year-to-date increase compared to the MSCI AC Asia Pacific's 6.5% increase, while the valuation of Topix members hovered around 16.7 times estimated 12-month forward earnings. (asd)
Source: Newsmaker.id
