Nikkei eases, oil drops as Trump calms Iran fears
Oil prices fell from multi-month highs on Thursday and safe-haven gold retreated from a record high after US President Donald Trump eased market concerns about possible US military action against Iran.
The sell-off in technology stocks also spilled into Asian trading, following further declines on Wall Street as investors looked for bargains elsewhere in the market from high-flying chip and AI-related names.
After the yen fell to its lowest level against the US dollar since July 2024, currencies paused for breath and then rebounded sharply amid warnings of possible intervention by Japanese officials.
Japanese bond yields have fallen from record highs after a spike sparked by speculation that the government will call early elections, a scenario that is expected to lead to larger fiscal stimulus.
Brent crude futures fell 2.4 per cent to US$64.94 (A$A97.19) and Nymex futures fell 2.4 per cent to US$60.51 (A$A90.56), from US$66.82 (A$A100.00) and US$62.36 (A$A93.33), respectively, in the previous session.
Trump said on Wednesday that he had been told killings during Iran’s crackdown on nationwide protests had decreased and that he believed there were no current plans for large-scale executions.
Gold fell 0.5 per cent to around US$4,598 ($A6,881) per ounce. It reached an unprecedented US$4,642.72 ($A6,948.10) on Wednesday.
In Asia, stocks were mixed but technology shares faced further selling.
Japan’s tech-heavy Nikkei fell 0.9 percent after reaching an all-time high in the previous session, but the broader Topix rose 0.4 percent on Thursday, breaking its own record.
Taiwan’s TAIEX lost 0.5 percent, and Hong Kong’s Hang Seng lost 0.4 percent, with the weight of technology stocks.
While mainland China’s blue chips remained flat, South Korea’s KOSPI index rose 0.3 percent to reach a new record high. The Bank of Korea left interest rates unchanged on Thursday as economists had predicted, signaling the end of the current easing cycle.
S&P 500 E-mini futures lost 0.1 percent after the cash index lost 0.5 percent overnight. The tech-focused Nasdaq Composite fell 1.0 percent.
“There’s a rotation on Wall Street that ultimately puts weight on the indexes but suggests the internal dynamics of the market are in pretty good shape,” said Kyle Rodda, an analyst at Capital.com.
“Strength in cyclicals, due in no small part to the positive outlook for the U.S. economy, is supporting equities and providing constructive signals to market participants about expanding market power.”
The US dollar remained stable against major currencies on Thursday, while the dollar index was flat at 99.107.
After rising as high as 159.45 yen on Wednesday, it retreated sharply and then fell slightly to 158.32 yen.
Japanese Finance Minister Satsuki Katayama issued another verbal warning on Wednesday, saying authorities would “take appropriate measures against excessive foreign exchange movements, without excluding any options.”
Prime Minister Sanae Takaichi plans to dissolve the lower house of parliament next week and call early parliamentary elections as early as February 8.
Expectations of greater fiscal stimulus along with improved mandates have encouraged investors to sell the yen and government bonds, causing long-term yields to soar to record levels in recent days.
Japan’s 20-year yield fell two basis points to 3.14 percent on Thursday after rising to an unprecedented 3.165 percent in the previous session.
Australia’s Associated Press is the beating heart of Australian news. AAP is Australia’s only independent national news channel and has been providing accurate, reliable and fast-paced news content to the media industry, government and corporate sector for 85 years. We inform Australia.
