03/09/2026
Fueled by falling crude oil prices and a stronger Japanese yen, Asian stock markets staged a rebound. U.S. President Donald Trump downplayed the risk of a prolonged conflict with Iran, easing market geopolitical concerns and putting an end to crude oil’s three-day winning streak.
Led by gains in Japanese and South Korean equities, the MSCI Asia Pacific Index climbed 0.9%, rebounding from Wednesday’s sell-off. Technology stocks outperformed broadly, boosted by Broadcom’s upbeat outlook for a booming AI chip market over the next two years.
In the Asian trading session, the yen remained the focal point, strengthening for the second consecutive trading day and hovering around 158.35 against the U.S. dollar. The yen’s sustained appreciation has put traders on high alert for potential intervention by Japanese authorities.
Cooling geopolitical tensions weighed on oil prices, with Brent crude dipping 0.3% to settle at $95.30 per barrel. Trump stated that any further U.S. strikes on Iran would likely be temporary and reaffirmed that the United States controls the strategically vital Strait of Hormuz, calming market fears of disrupted energy supplies from the Middle East.
The drop in oil prices bolstered U.S. Treasury prices, pushing the benchmark 10-year Treasury yield down to 4.78% on Wednesday. The Bloomberg Dollar Spot Index also declined for the second straight day. In Japan, ahead of Thursday’s government bond issuance, the yield on 30-year Japanese government bonds fell 10 basis points to 4.065%.
Market sentiment shifted from cautious to optimistic in early September. Previously, escalating tensions in Iran drove up oil prices and triggered a surge in global bond yields, stoking inflation concerns and spurring market bets on a Federal Reserve rate hike this month. Earlier this week, heightened geopolitical risks in the Middle East triggered a widespread sell-off in global bonds. Lingering uncertainties over the Iran situation have renewed inflation worries, keeping investors cautious in the bond market.
With the U.S. earnings season largely concluded, market focus has shifted to upcoming U.S. economic data due for release, which will offer clues on the U.S. economic outlook and future monetary policy moves. The 10-year U.S. Treasury yield is consolidating around 4.78%, with investors awaiting weekly U.S. initial jobless claims data due later Thursday and the key U.S. nonfarm payrolls report scheduled for Friday.
The yen’s rally initially took hold on Wednesday after a Bank of Japan board member signaled the possibility of substantial and consecutive interest rate hikes. The sharp yen fluctuation during New York trading hours quickly rippled through the $9.5 trillion global foreign exchange market.
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