Japan's Nikkei 225 index surged by 4.06% to 66,822.56 as of 0025 GMT, driven by optimism over a potential peace deal between the United States and Iran that could be signed as soon as this weekend. The broader Topix index also gained 2.2% to 3,914.74, buoyed by strong performances in technology stocks.
Technology shares led the charge on the Nikkei, with Advantest and Tokyo Electron seeing significant gains of 8.8% and 10.49%, respectively. Memory chipmaker Kioxia rose by 5.94%, while technology investor SoftBank Group increased by 3.34%. However, not all sectors fared well; staffing agency Recruit Holdings and Sony Group both fell by over 1%.
The Tokyo Stock Exchange saw 29 of its 33 industry sub-indices rise, with the mining sector being the notable exception, declining by 1.02% to become the worst performer of the day.
President Donald Trump announced on Thursday that the United States and Iran could potentially sign a peace agreement soon, which would reopen the Strait of Hormuz to shipping. However, Iran has stated that it has not yet reached a final decision on the agreement.
The potential reopening of the Strait of Hormuz is significant for global trade, as it is a critical passageway for oil shipments. The news has injected optimism into the markets, particularly benefiting technology stocks in Japan.
Background
The Strait of Hormuz is a vital corridor for the global oil supply, and tensions in the region have historically impacted global markets. A peace deal could stabilize the region, potentially leading to increased shipping and trade activities.
Looking ahead, investors will be closely monitoring developments in the US-Iran negotiations, as a finalized peace deal could have substantial implications for global markets and trade dynamics.
