Asian stocks experienced a notable increase on Monday following the announcement of a tentative peace deal with Iran by U.S. President Donald Trump. This development contributed to alleviating investor worries regarding inflationary pressures and reduced the urgency for interest-rate hikes. The signing ceremony is scheduled for Friday in Switzerland, coming after weeks of inconsistent communication from both Washington and Tehran regarding the direction of the conflict. With no official terms yet released, the specifics of the agreement remain ambiguous. The U.S. dollar reached a 10-day low, while global bond yields softened, contributing to a more than 2 percent increase in gold prices, which rose to $4,313 an ounce during Asian trading in anticipation of several central bank meetings scheduled for the week. Brent crude futures experienced a decline of more than 4 percent, approaching $83 a barrel, significantly lower than the May peak of $126.41 a barrel. This drop followed Trump’s announcement regarding a tentative deal that involved the opening of the crucial Strait of Hormuz, although further details were not provided. China’s Shanghai Composite index surged 1.61 percent to 4,096.47, while Hong Kong’s Hang Seng index closed half a percent higher at 24,842.67. Shares of Knowledge Atlas Technology, the entity associated with Chinese AI model developer Zhipu, surged 33 percent following reports that JPMorgan upheld its overweight rating on the stock. This decision was attributed to the firm’s model visibility and its pricing power in a highly competitive market.

Japanese markets experienced a significant increase as geopolitical tensions subsided, the yen continued to weaken, and government bond yields fell ahead of the upcoming Bank of Japan policy meeting. The central bank is anticipated to elevate its benchmark interest rate to the peak level observed since 1995 following the conclusion of a two-day meeting on June 16. The Nikkei index surged 4.99 percent to 69,317.50, surpassing the 69,000 mark for the first time ever. The broader Topix index concluded the trading session with a gain of 3.03 percent, reaching a level of 3,999.60. Semiconductor and other tech stocks led the gainers, with Advantest, Tokyo Electron, and SoftBank Corp experiencing rallies of 7-10 percent. Taiyo Yuden, a materials and electronics company, experienced a notable increase of 22.6 percent, while Ibiden saw a rise of over 19 percent, and Murata Manufacturing recorded an addition of 17.6 percent. Seoul stocks experienced a significant increase, closing higher for the third consecutive day, driven by declining government bond yields and a steep drop in oil prices. The Kospi index experienced a significant increase of 5.20 percent, reaching 8,545.98, driven primarily by the strong performance of chip manufacturers. Samsung Electronics, SK Square and SK Hynix experienced a notable increase of 4-6 percent.

LG Electronics experienced an increase of 11.2 percent following reports indicating that the company is in the process of developing a custom Arbitrum layer-2 blockchain network aimed at automating and optimising the global advertising market. Earlier in the day, the country’s bourse operator activated a circuit breaker, halting program trading for five minutes following a 5 percent increase in KOSPI 200 index futures. Australian markets have reached an eight-week peak, driven by the performance of mining and gold stocks. Woodside Energy shares experienced a decline of 5.7 percent following the company’s announcement that it is not engaged in discussions with Exxon Mobil concerning a potential acquisition. The benchmark S&P/ASX 200 experienced a rally of 1.25 percent, closing at 8,914, while the broader All Ordinaries index concluded the day up 1.35 percent at 9,128. Across the Tasman, New Zealand’s benchmark S&P/NZX-50 index declined by 0.25 percent to 13,360.59, relinquishing earlier gains. Fisher & Paykel Healthcare experienced a decline of 3.3 percent, while Meridian Energy saw a decrease of 2.5 percent.

On Friday, U.S. stocks experienced an upward movement, fuelled by positive sentiment surrounding a potential peace agreement in the Middle East and the much-anticipated public launch of SpaceX. Following reports from Iranian media regarding the purported terms of a potential ceasefire agreement, President Trump asserted that the disclosed terms bear ‘NOTHING to do with the terms that were agreed to, in writing.’ He further emphasised that engaging with them in good faith is not feasible. His remarks followed the publication by IRNA of what is characterised as seven main points of the deal, suggesting that Iran has made virtually no concessions on critical issues. Iranian Foreign Minister Abbas Aragchi indicated that a ‘Islamabad Memorandum of Understanding’ aimed at achieving a ceasefire has reached a point of unprecedented proximity. The Dow increased by 0.7 percent, the S&P 500 rose by half a percent, and the tech-focused Nasdaq Composite saw a gain of 0.3 percent.