Stock markets: Tokyo down and oil prices up following US strikes on Iran

The Tokyo Stock Exchange is down and oil prices are up following the US attacks on Iran.

The Tokyo Stock Exchange opened lower, following a correction in US share indices and a rise in oil prices, whilst fears of an escalation in the Middle East have resurfaced following fresh US air strikes in Iran and the possibility of a renewed closure of the Strait of Hormuz. At the opening, the benchmark Nikkei index was down 1.01% at 67,567.96, a loss of 689 points. In the foreign exchange market, the yen lost ground against the dollar, trading at 162.10, whilst it remained stable against the euro at 185.10.

Oil prices have therefore risen following the US attacks on Iran. The price of the US benchmark crude rose by more than 2.5 per cent, reaching its highest levels in the last two weeks. West Texas Intermediate rose by 2.3 per cent to $72.03 per barrel, whilst North Sea Brent crude rose by 2.2 per cent to $75.76 per barrel.

The stock markets have been affected by the situation, with renewed tensions between the United States and Iran compounding the downturn in the technology sector, which had driven the markets to multiple all-time highs over the past two years. Seoul’s Kospi index plummeted by more than one per cent and has fallen by more than 20 per cent since reaching an all-time high last month. Samsung suffered a further blow following Tuesday’s slump, which came despite forecasts of a surge in operating profit of over 1,800 per cent in the second quarter, driven by strong demand for artificial intelligence chips.

Losses were also recorded in Tokyo, Shanghai, Sydney, Singapore, Wellington and Taipei. However, Hong Kong posted a rise of more than one per cent. The dollar extended its gains against other currencies as the prospect of a further drop in supplies from the Middle East fuelled fears that inflation could remain high for longer than expected, putting pressure on the Federal Reserve to raise interest rates.