Nikkei up 1.9pc, Kospi adds 2.6pc as Asian shares pump on Iran-US talks

SYDNEY, June 22 — Asian share markets swung higher on Monday as Iranian negotiators said progress had been made in peace talks with the United States, helping calm fears the process was breaking down.

Officials from ‌Qatar and Pakistan also released a statement saying the first session of talks had concluded and progress was made on ​a roadmap to reach a final deal in 60 days.

Earlier, US President Donald Trump had threatened fresh attacks on Iran as Vice President JD Vance met Iranian officials for the first talks under an interim peace deal.

The talks had been overshadowed by Tehran’s announcement it had again closed the Strait of Hormuz, ​with tracking sites showing fewer vessels transiting after 32 ships made the passage on Friday and 26 on Saturday.

The news saw Brent crude futures shed early gains to ease 0.4 per cent to US$80.17 (RM332) a barrel, far away from its May peak of US$126.41. US crude remained 1.2 per cent firmer at US$77.52 a barrel.

Japan’s Nikkei rose 1.9 per cent, having climbed almost 8 per cent last week to all-time highs. South Korea’s red-hot market added another 2.6 per cent, after surging more than 11 per cent last week on demand for semiconductor stocks.

MSCI’s broadest index of Asia-Pacific shares ‌outside Japan gained 1.0 per cent, while Chinese blue chips were flat.

S&P 500 futures pared early losses to be off 0.2 per cent, while Nasdaq futures lost 0.3 per cent. ⁠In Europe, EUROSTOXX 50 futures edged down 0.1 per cent, while DAX futures ⁠were near flat and FTSE futures added 0.1 per cent.

Market narrows odds on Fed hike

Treasuries remained under ⁠pressure following a hawkish turn by the Federal ⁠Reserve last week that led ⁠markets to price in a 75 per cent chance of a rate hike as early as September.

Futures imply 38 basis points of tightening by year-end, while yields on 2-year notes rose as much as 4 basis points to the highest since early 2025 at 4.2276 per cent. “Our baseline call is ⁠for patience and a first hike in the second half of 2027, but believe the margin for error and the tolerance for further inflation is limited, with genuine risks of earlier hikes,” said Fabio Bassi, head of cross-asset strategy at JPMorgan.

“We remain constructive on risk assets as improving labour markets will keep rates higher for longer, supporting a narrow leadership in Quality Growth, Large Cap and Tech,” he added. “We see upside risks for the S&P target tilted towards 8,000.”

The Fed’s favoured gauge of core inflation is due on Thursday and ⁠is forecast to rise a tick to 3.4 per cent in May, underlining the risk of tighter policy.

Central bank speakers include Governor Christopher Waller and Federal Reserve Bank of New York President John Williams.

The Fed’s hawkish outlook kept the dollar supported ⁠at 161.48 yen, with only the threat of Japanese intervention preventing a test of resistance at 161.96, a top from mid-2024.

The euro eased to US$1.1464, after ⁠hitting a three-month ⁠low on Friday at US$1.1418. Political uncertainty nudged sterling down 0.2 per cent to US$1.3210.

Reports claimed Prime Minister Keir Starmer was considering his political future, after rival Andy Burnham’s decisive election ​victory to parliament prompted more ministers in the governing Labour Party to call for ​him to go.

“Amid the uncertainty around a potential challenge against the ‌UK PM and what that means for the fiscal outlook, the likelihood is that gilts ​will remain under selling pressure to start the ​week,” said Skye Masters, head of market research at NAB.

In commodity markets, news of the progress in peace talks helped gold bounce 1.1 per cent to US$4,205 an ounce. — Reuters