U.S.-Iran Conflict Risk and Negotiation Coexist; Japanese and Korean Stocks Reach New Highs

The Pentagon stated that the U.S. military conducted a self-defense counterattack in southern Iran, targeting missile launch sites and Iranian vessels suspected of mining. Iran subsequently fired back at the U.S. airstrikes, putting the fragile cease-fire agreement to the test and overall tensions escalating once again. Although Trump indicated that negotiations to end the war were progressing smoothly, he warned that if the talks collapsed, the U.S. would switch to the offensive. Additionally, according to U.S. media reports, the U.S. Navy is currently quietly assisting vessels to pass through the Strait of Hormuz.

Geopolitical risks are intertwined with optimistic negotiation sentiments, and as of May 27, stock markets in the Asia-Pacific region performed divergently upon opening.

The Nikkei 225 opened up 1.36%, then expanded intraday gains to 2%, historically surpassing the 66000-point mark for the first time. The Korean KOSPI Index opened up 2.43% and quickly rose, increasing 5% intraday to 8450.26 points, setting a new historical high. Due to a 5% increase in the price of South Korean KOSPI 200 futures, the South Korean exchange triggered a circuit breaker to limit algorithmic trading, resulting in a 5-minute suspension of algorithmic trading.

Australia's S&P/ASX 200 index slightly declined, reporting at 8,642.30 points. The Hong Kong Hang Seng Index continued to be lackluster, with the latest price at 25,599.45 points, lower than the previous trading day's closing value.