Key facts
- Nikkei 225 and KOSPI indices hit record highs on June 18.
- AI optimism and a U.S.-Iran peace deal fueled market gains.
- Brent crude fell 9% to $79.42 a barrel.
- The yen weakened to 161.3 against the dollar.
- The Bank of Japan raised its policy rate to 1%.
Japanese and South Korean stock markets reached record highs on June 18, buoyed by optimism surrounding artificial intelligence and hopes for a de-escalation in geopolitical tensions, particularly a potential U.S.-Iran peace deal. The Nikkei 225 was on track for a 7.6% weekly gain, while the KOSPI rallied a significant 11%.
European markets, with less direct exposure to AI-related stocks, were anticipating a lower open, with pan-region futures down 0.5%. There was relief as tankers began moving through the Strait of Hormuz, though supply recovery timelines remained uncertain. Brent crude oil prices slumped 9% for the week, settling around $79.42 a barrel, a development welcomed by global central banks.
The Japanese yen weakened considerably against the U.S. dollar, reaching 161.3 yen per dollar, despite the Bank of Japan's recent rate hike to 1%, its first increase in 31 years. In the UK, political developments involving Labour mayor Andy Burnham's new parliamentary seat could impact the Gilt market.
Key economic data expected on Friday included German Producer Price Index (PPI) for May and UK retail sales for May, alongside appearances by ECB board members Philip Lane, Piero Cipollone, and Frank Elderson.