Stock markets in Tokyo, Hong Kong, and Taipei slipped as uncertainty loomed over whether the United States might enter the escalating military conflict between Israel and Iran. President Donald Trump, in typically ambiguous fashion, hinted at possible military involvement but stopped short of a clear commitment. “I may do it. I may not do it,” he told reporters outside the White House, fueling speculation and market volatility.
According to The Wall Street Journal, Trump has given preliminary approval for military action against Iranian nuclear sites but is delaying the final order in hopes that Tehran might reconsider its nuclear ambitions. The ambiguity has left global markets jittery, with traders balancing the risk of a broader regional conflict against hopes of diplomatic restraint.
In Asia, Japan’s Nikkei 225 fell 0.8%, compounded by a strengthening yen, which typically hurts exporters by eroding overseas profits. Taiwan’s main index declined by 0.9%, and Hong Kong’s Hang Seng lost 0.8%, reflecting broader regional unease. Meanwhile, U.S. stock futures pointed to a soft open, with S&P 500 futures slipping 0.4%, even though U.S. markets remained closed Thursday for a national holiday.
Gold climbed 0.3% to $3,378 per ounce, underlining its status as a preferred store of value during periods of geopolitical risk. The yen strengthened 0.2% to 144.92 per dollar, and the U.S. dollar also made modest gains against the euro and British pound, reflecting heightened demand for relatively safer assets.
“Market participants remain edgy and uncertain,” said Kyle Rodda, senior market analyst at Capital.com. “Speculation remains rife – likely fed strategically by the Trump administration – that the U.S. will intervene. Such a move could mark a major escalation and potentially prompt direct retaliation by Iran. That, in turn, would raise the risk of a wider regional conflict with serious implications for energy markets and global economic growth.”
Despite the geopolitical strain, oil prices showed some resilience. Brent crude edged down slightly to $76.32 per barrel, but remained near its recent peak of $78.50—a 4½-month high—amid concerns that an extended conflict in the Middle East could disrupt supply chains.
In currency markets, the dollar firmed modestly while the Swiss franc dipped 0.1% to 0.8193 per dollar. Central bank decisions also drew attention, with the Bank of England expected to hold interest rates steady and the Swiss National Bank widely anticipated to cut rates by 25 basis points.
Meanwhile, the Federal Reserve, in a decision released overnight, opted to hold interest rates but left the door open to two potential cuts later in the year. Fed Chair Jerome Powell added a layer of caution, warning that Trump’s aggressive trade policies could stoke further inflation, possibly complicating the Fed’s path toward monetary easing.
As markets await clearer signals from both Washington and Tehran, investors remain on edge—navigating a precarious mix of geopolitical brinkmanship and shifting economic policy.