Asian Markets Surge as Trump Signals End to Iran War Within Weeks
Asian stock markets experienced a sharp rally on Wednesday following remarks from former President Donald Trump indicating that the United States would withdraw from the military conflict with Iran within two to three weeks, regardless of whether a diplomatic agreement is reached. This announcement has raised hopes that the month-long war, which has severely disrupted global energy markets, may be approaching its conclusion.
Market Performance Across the Region
South Korea's Kospi index surged by 6.4 percent in early trading, while Japan's Nikkei 225 rose 4 percent. Hong Kong's Hang Seng gained 1.9 percent, and Taiwan's Taiex increased by 4.3 percent. Australia's S&P/ASX 200 rose 1.7 percent, and India's BSE Sensex jumped more than 1,800 points in early trade, with broad-based buying observed across banking, financial, and technology stocks.
Despite these gains, both the Nikkei and Kospi remain below the levels at which they were trading before the war began on February 28. A survey released Wednesday by Japan's central bank showed that business sentiment among major manufacturers had improved, even amid ongoing war-related concerns.
Trump's Statements and Market Reactions
Speaking from the Oval Office on Tuesday, Trump stated that Iran was "begging to make a deal" but emphasized that whether an agreement is reached is "irrelevant" to America's timetable for withdrawal. He also urged U.S. allies to "go get your own oil" and called on other nations to take control of the Strait of Hormuz, declaring that the U.S. "will not have anything to do with" future developments in that critical waterway.
Analysts noted that these remarks have done little to resolve the underlying uncertainty that continues to hang over global markets. Lukman Otunuga, head of market research at FXTM, commented: "Markets are being pulled in multiple directions by geopolitics and macro fundamentals. The ongoing uncertainty around the Iran conflict and the Strait of Hormuz is keeping oil prices elevated and volatility high. While energy markets remain fundamentally supported, any signs of de-escalation could trigger sharp reversals."
Oil Prices and Economic Impact
Oil prices steadied on Wednesday but remained elevated, with Brent crude up 1.5 percent at $105.48 a barrel and U.S. benchmark crude rising 1.3 percent to $102.73. The price of Brent for May delivery recorded a historic 64 percent increase in March—the largest monthly gain since Iraq's invasion of Kuwait in 1990—as Iran threatened to attack vessels using the Strait of Hormuz, effectively closing this key shipping route through which approximately one-fifth of the world's oil normally passes. U.S. petrol prices surged past an average of $4 a gallon on Tuesday for the first time since 2022.
Gold has fallen around 14 percent this month despite broader risk-off sentiment, pressured by a stronger U.S. dollar and shifting interest rate expectations. The dollar's strength has also pushed the USD/JPY exchange rate above 160, a level previously defended by Japanese authorities, raising the prospect of intervention. Japan and South Korea have been among the hardest-hit economies in the conflict, both being heavily reliant on Middle Eastern energy.
Iran's Demands and Ongoing Military Operations
Iran reiterated on Wednesday that five specific demands must be met before it ends the war. Earlier, Iranian President Masoud Pezeshkian stated that his country has the "necessary will" to end the fighting but demanded guarantees against future aggression. Fawad Razaqzada at Forex.com told Bloomberg: "It's difficult to see Iran stepping back without extracting concessions. While Trump may be considering an end to hostilities, the key issue—the status of the Strait—remaining unresolved will be what's more important from the market's point of view."
A third U.S. aircraft carrier strike group is heading to the region as military operations continue, following the Navy's flagship carrier leaving for repairs. Trump is expected to address the nation on Wednesday evening with what the White House described as an "important update" on Iran.
Upcoming Economic Indicators
Friday's U.S. jobs report will also be closely watched, with payrolls forecast to rebound to 65,000 after a loss of 92,000 in the prior reading. Otunuga added: "With expectations for a modest rebound in payrolls, the outcome could significantly influence Fed rate expectations, especially as rising energy prices complicate the inflation outlook. We may see heightened volatility across currencies, commodities, and equities as investors digest these developments."
The gains in Asian markets followed a strong session on Wall Street on Tuesday, where the S&P 500 jumped 2.9 percent for its largest single-day gain since May, the Nasdaq leaped 3.8 percent, and the Dow Jones Industrial Average surged 2.5 percent.
