Japan's Nikkei index on the Tokyo Stock Exchange surged over 4% on June 8, extending gains from the previous week, driven by expectations of a peace deal in the Middle East.
According to Kyodo News, Japanese stock markets opened strongly in positive territory, with the Nikkei crossing the 38,000-point mark. The rally was fueled by reports of progress in peace negotiations between conflicting parties in the Middle East.
Analysts suggest that if peace is achieved, crude oil prices and shipping costs could drop significantly, easing global inflationary pressures and allowing central banks to loosen monetary policy. This would particularly benefit Japanese exporters, which rely heavily on imported energy.
Notably, energy and shipping stocks led the gains. Shares of oil companies like Inpex and shipping firms such as Nippon Yusen recorded double-digit increases. Meanwhile, a weaker yen also supported market gains by making Japanese exports more competitive.
By the end of the morning session, the Nikkei had risen 4.2%, marking its strongest single-day gain in three months. Trading volume also surged compared to recent averages, reflecting significant participation from foreign investors.
