Japan’s stock market is gearing up for another leg higher after President Trump signaled that a deal with Iran is within reach. For a country that imports nearly all of its oil, fewer Middle East tensions translate almost directly into cheaper energy costs and fatter corporate margins.
The Nikkei 225 has already been responding to every breadcrumb of progress on the US-Iran front. On May 25, the index surged 2.9%, closing at 65,158.19 points after Trump described negotiations as moving in an “orderly and constructive” manner.
Why Japan cares more than most
When tensions flared earlier in the year, the Nikkei showed mixed reactions through March and April as Trump toggled between hawkish rhetoric about Iran strikes and softer language about energy infrastructure cooperation.
Then came the June 11 escalation-that-wasn’t. Trump canceled planned military strikes against Iran and indicated that an agreement was imminent. Oil prices began falling as fears of supply disruptions faded, and Japanese stocks caught a bid almost immediately.
