Japan, South Korea stocks hit records as oil prices fall
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- Japan and South Korea equities hit record highs Friday, with the Nikkei gaining 0.8% for a fifth straight record session and South Korea jumping 3.1%, extending weekly gains to 8.5% and 15.3% respectively.
- The United States lifted its blockade on Iran on Thursday as an interim deal to end the three-month war took effect, allowing oil tankers to resume sailing through the Strait of Hormuz.
- Brent crude fell 1% to $79.03 a barrel on Friday, bringing its weekly drop to 9.5%.
- Commonwealth Bank analyst Madison Cartwright warned Iran was unlikely to relinquish control of the strait, noting future governance would be led by Iran and Oman with scope for a "maritime service" fee; toll-free transit was only guaranteed for 60 days.
- The US dollar hovered near a 13-month high after a hawkish Federal Reserve turn, pushing the yen to 161.26 per dollar — the lowest since July 2024 and beyond the 160 level often seen as a trigger for Japanese intervention.
- The Federal Reserve saw 9 of 19 officials signal higher borrowing costs this year, with new Chair Kevin Warsh vowing price stability; two-year Treasury yields rose 9 basis points to 4.1790% while 30-year yields fell 7 basis points to 4.9010%.
- Intel shares jumped 10% to a record high after President Donald Trump said Apple had agreed to work with Intel to design and manufacture its chips in the US.
Why it matters: The Nikkei's fifth straight record masks a fragile setup: the Hormuz rally is built on a 60-day toll-free window, and analysts say Iran is poised to impose "maritime service" fees going forward — a precedent that could be replicated elsewhere, while a hawkish Fed pushes the yen past levels that previously triggered Japanese intervention.
