Asia-Pacific Markets Mixed Amid Israel-Iran Tensions; BOJ Holds Interest Rates Steady
Asia-Pacific stock markets traded mixed as investors monitored the Israel-Iran conflict and reacted to the Bank of Japan’s decision to keep interest rates unchanged. Market sentiment remains cautious amid geopolitical risks.
Asia-Pacific Markets Mixed Amid Israel-Iran Tensions; BOJ Holds Interest Rates Steady
Asia-Pacific markets experienced a volatile trading session on Tuesday, June 17, 2025, as investors responded to heightened geopolitical tensions between Israel and Iran. The situation intensified after U.S. President Donald Trump urged all civilians to evacuate Tehran and cut short his appearance at the G7 summit due to the escalating Middle East crisis.
Geopolitical Risks Weighed on Sentiment
Credit agency Fitch Ratings maintained that the current conflict remains within manageable limits for Israel’s sovereign credit profile, which stands at 'A' with a negative outlook. The agency noted that while the fighting is severe, it’s expected to be contained and short-lived.
Echoing a similar sentiment, Samy Chaar, Chief Economist and CIO at Lombard Odier (Switzerland), stated that the confrontation appears to be under control, although uncertainties around the conflict and higher energy prices could pose risks to global economic growth and inflation.
Asian Markets Overview
- Japan: The Nikkei 225 rose 0.59% to close at 38,536.74, while the Topix climbed 0.35% to 2,786.95. The Bank of Japan left its benchmark interest rate unchanged at 0.5% and signaled a gradual reduction in government bond purchases starting April 2026.
- South Korea: The Kospi inched up 0.12% to 2,950.30. However, the tech-heavy Kosdaq declined 0.21% to close at 775.65.
- China: The CSI 300 index ended flat at 3,870.38, while the Shanghai Composite dipped marginally by 0.04% to 3,387.40.
- Hong Kong: The Hang Seng Index fell 0.34%, closing at 23,980.30.
- Australia: The S&P/ASX 200 ended nearly flat, dropping 0.08% to 8,541.30.
- India: Mid-day trading saw the Nifty 50 down 0.42%, while the BSE Sensex dropped 0.35%.
U.S. Futures and Global Sentiment
U.S. stock futures declined slightly during Asia hours as investors digested geopolitical developments. However, Wall Street closed higher on Monday amid optimism about a peaceful resolution in the Middle East:
- Dow Jones gained 317.30 points (+0.75%) to close at 42,515.09.
- S&P 500 advanced 0.94% to 6,033.11.
- Nasdaq Composite surged 1.52% to settle at 19,701.21.
