Japanese, Korean markets surge on end-of-Iran-war news
by Andrew Salmon · The Washington TimesSEOUL, South Korea — Markets in Seoul and Tokyo surged Monday on news that the U.S. and Iran agreed to end hostilities in the Middle East.
As crude oil future prices plummeted on the news, in Tokyo, Japan’s benchmark Nikkei 225 index closed up 4.99% at 69,317.50 points — the first time it has ever breached the 69,000 mark.
In Seoul, the benchmark KOSPI index closed up 5.20% at 8,545.98 points — though in an era of hyper volatility, that was shy of its all-time high, 8,801.49 points, hit earlier this month.
The results reflect major confidence from markets, even though it is far from clear if the agreement, set to be signed in Switzerland Friday to halt an on-again, off-again conflict that was initiated by Israel and the U.S. against Iran on Feb. 28, and subsequently generated chaos and carnage around the Middle East, will hold.
Though the news has been broadly welcomed across the international community, hard-liners in one of the belligerent nations, Israel, have already come out against it.
Nor is it clear how quickly energy supply normality can resume, given damage to facilities operated by all parties around the Gulf during the hostilities, and given the density of shipping trapped in the Gulf at present.
Even so, Japanese Prime Minister Sanae Takaichi hailed the announcement, in a post on X, as “a major step toward resolution of the situation.”
“We strongly hope that this memorandum will be steadily implemented, that free and safe navigation in the Strait of Hormuz will be actually ensured, and that a final agreement on Iran’s nuclear issue and other matters will be realized at the earliest possible date,” her message continued.
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She also said that Japan would sign onto a statement by France, Germany, Italy and the U.K. enabling free navigation in the Strait of Hormuz, the key entry-exit point from the energy-rich Gulf, and lifting sanctions on Iran as a reward for its anticipated denuclearization.
“We have been asked to participate … and we will,” she said, according to Japanese media reports from Rome, where she has conducted summitry prior to attending the Group of Seven summit in Evian, France.
The conflict is expected to be a key agenda item during the meeting of the heads of the world’s most prosperous democracies, which starts Monday and runs through Wednesday.
However, it has not been confirmed that Japanese vessels — whose operations are restricted by Japan’s Pacifist constitution — will be dispatched to the Gulf.
According to Kyodo News, Japan’s top government spokesman, Chief Cabinet Secretary Minoru Kihara, told reporters in Tokyo that “nothing had been decided” regarding a deployment.
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Japan’s Maritime Self-Defense Force is notable for its long-held expertise in anti-mine operations.
After World War II, Japanese vessels spent decades clearing tens of thousands of mines laid by the U.S. in its coastal waters, and also conducted little-known mine clearance during the Korean War.
Both operations commenced before the official activation of the SDF, in 1954.
In addition to sea mines, risks in the strait include drone, missile, fast boat and mini-submarine bases dug into Iran’s rugged littoral.
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Like other U.S. allies around the world, neither Seoul nor Tokyo was consulted on the opening of hostilities by Washington, though both the Gulf-reliant nations field powerful navies.
Both declined to send assets to try and open the Strait of Hormuz, despite U.S. imprecations in the conflict’s early days.
However, both were largely spared the verbal wrath that U.S. President Trump and some of his officials unleashed against NATO nations.
South Korean President Lee Jae-myung was also in Rome, where he met the pope. He, too, will join the G7, though as an observer; Korea is not an official member.
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In a post on X, he wrote, “We welcome the resolution of the Middle East-related negotiations. This represents a significant step forward toward resolving a situation that the international community has long anticipated.”
He hinted that South Korea would join international efforts in the area.
“Moving forward, we will continue to closely coordinate with the United States and the international community to ensure the sustained guarantee of free and safe navigation in the Strait of Hormuz, fulfilling our necessary roles,” he wrote.
Both Japan and South Korea have signed onto a France-U.K.-led initiative, established in April, to ensure “safe and sustained” navigation through the Strait of Hormuz once hostilities cease.
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The Europe-heavy initiative includes 40 nations from around the world. The U.S. is not party to the agreement, with Mr. Trump insisting the task should be done by nations which — unlike the U.S. — rely on Middle Eastern oil.
Of the approximately 2,000 vessels trapped in the Gulf, 38 are “Japan-linked” according to specialist marine media Baird Maritime, while 24 are South Korean, according to Seoul media.
A spokesman for the Japanese Shipowners Association told Baird Maritime that it would “wait a little longer for concrete information” before vessels began moving out. Citing the possibility of mines, the spokesman said, “Given the situation, we cannot simply say, ’Right then, let’s go’ based on news of the agreement alone.”
A South Korean oil tanker and an LNG carrier swallowed the risk and transited the Strait last week.
Earlier, in May, a South Korean ship was damaged by Iranian projectiles while at anchor off the UAE coastline in May. She is being repaired in Dubai.
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Andrew Salmon
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