Asian markets mixed after recent oil surge

Asian markets experienced a mixed performance on September 25 following recent surges in oil prices, amid concerns over the ongoing Middle East conflict and rising bond yields. The United States and Japan saw their bond yields hit multi-year highs, while the Middle East war remained unresolved, creating lingering risks for the future.

Although oil prices experienced a slight decline, Brent Crude had surged more than 3 percent the day before. Global stock markets had mostly declined earlier in the week, with bond yields hitting 30-year highs in the United States and the United Kingdom.

Experts noted that the situation remained volatile, with questions lingering about the bond crisis and the Middle East war's trajectory. Kathleen Brooks, research director at XTB, highlighted that the market's direction was unclear, mentioning factors such as the potential for a bond crisis and the evolving situation in the Middle East. As a result, volatility was expected to persist, particularly in commodity and bond markets.

Tokyo's stock market closed 1.3 percent higher, but Hong Kong fell 1.3 percent, while Sydney and Jakarta also experienced declines. Shanghai, Taipei, and Seoul were closed for holidays. In London, the market opened 0.6 percent higher, with Frankfurt and Paris also gaining. Despite the mild stock dips this week, foreign exchange markets demonstrated moderate movements with a notable preference for the US dollar.

Japanese Finance Minister Satsuki Katayama revealed that US President Donald Trump had expressed concerns over the weak yen during a bilateral meeting in Washington. Meanwhile, US President Donald Trump had hosted China's Xi Jinping for a state dinner in the White House, marking a diplomatic interaction despite deep tensions between the two superpowers.

Although no major breakthroughs were anticipated, one minor success was the extension of a trade truce for two more months until January 10, although important issues such as tariffs, agricultural purchases, rare earths, and technology restrictions remained unresolved. Experts expressed concerns about geopolitical risks arising from the Middle East, tight oil markets, and ongoing US-China trade risks.