Key Takeaways
- Taiwan’s benchmark index surged 3.2% to a historic record of 40,185.03 points, driven by a massive rally in the semiconductor sector.
- Crude oil prices climbed above $107 per barrel as Iran offered a deal to reopen the Strait of Hormuz while demanding a postponement of nuclear negotiations.
- The People’s Bank of China (PBOC) fixed the yuan at 6.8579, marking its strongest level since March 2023 to combat regional volatility.
- Japanese Government Bond (JGB) yields rose across the curve as the Bank of Japan (BOJ) kicked off a two-day meeting following a 6.2 magnitude earthquake in Hokkaido.
Taiwan Markets Reach Historic Milestone
Taiwan’s equity market reached an unprecedented peak on Monday, with the benchmark index surging 3.2% to close at 40,185.03 points. The rally was supported by a broader tech surge in Asia, highlighted by a 5.4% gain in South Korean chipmaker SK Hynix (000660).
Investor sentiment remains buoyed by high demand for advanced semiconductors, even as regional geopolitical tensions persist. The overnight interbank rate in Taiwan remained stable, opening at 0.805%, matching the previous session.
Iran Proposes Strait Reopening Amid Blockade
Tensions in the Middle East took a complex turn as Iran reportedly offered a revised plan to the U.S. to reopen the Strait of Hormuz. According to Axios, the proposal prioritizes ending the current naval blockade before addressing nuclear negotiations, though divisions within Iranian leadership remain high.
Crude oil prices climbed above $107 a barrel as the market reacted to the continued closure of the Strait and the U.S. naval blockade. U.S. forces have reportedly turned around 38 ships attempting to enter or exit Iranian ports, though tracking data suggests some crude continues to leak through.
Japan Braces for BOJ Meeting and Earthquake Recovery
The Bank of Japan began its two-day policy meeting today against a backdrop of rising yields and natural disaster recovery. The yield on the 20-year JGB rose 2.5 basis points to 3.320%, while the 30-year yield increased to 3.675%.
Japan’s Prime Minister Sanae Takaichi stated the government is monitoring the Middle East’s impact on the domestic economy. While a 6.2 magnitude earthquake struck Hokkaido earlier today, the PM assured the public that oil supplies are secured through next year.
China Strengthens Yuan Amid Commodity Gains
The People’s Bank of China signaled a preference for currency strength by fixing the yuan at 6.8579, the strongest level since March 2023. This move comes as industrial commodities see renewed interest, with the most-traded nickel futures contract in Shanghai gaining more than 3%.
In other regional developments, North Korean leader Kim Jong Un reaffirmed his continued support for Russia’s policies. Meanwhile, in Hong Kong, the English Schools Foundation (ESF) reported reserves reaching HK$3.75 billion, despite a reduction in government subsidies.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.