Asia-Pacific markets are bracing for a violent positive open Monday after Singapore-traded SGX Nikkei futures surged 3.4% in Sunday-morning electronic trading following Saturday's formal signing of the Iran ceasefire and the first Saudi tanker convoy transit through the Strait of Hormuz. KOSPI 200 futures climbed 3.7%, while Hang Seng futures jumped 4.1%.
The implied moves would mark the largest single-day rally for major Asian indices since the COVID-19 vaccine breakthrough rally of November 2020. Japan, South Korea, and Taiwan are disproportionately exposed to Gulf energy supply disruptions — collectively importing approximately 78% of their crude requirements through the Strait of Hormuz — making them among the biggest beneficiaries of the conflict's resolution.
Yen, Korean Won Likely to Strengthen
The Japanese yen, which closed Friday at 147.8 per dollar after breaking below 148 for the first time since the conflict began, is expected to test 145 in early Monday Tokyo trading as Japan's improved energy import outlook reduces yen-bearish flows. Bank of Japan policy guidance pricing has flipped sharply — overnight index swaps now imply a 64% probability of a rate hike by the July meeting, up from 18% two weeks ago.
The Korean won, which had weakened to 1,420 per dollar at the height of the crisis, traded at 1,388 Friday and is expected to break below 1,380 on Monday. Bank of Korea Governor Rhee Chang-yong is scheduled to speak at Tuesday's monetary policy committee meeting and is widely expected to signal a more hawkish stance as inflation concerns ease.
China Stimulus Optimism Adds to Bid
Hong Kong's Hang Seng Index, which closed Friday at 24,107, is positioned to test the 25,000 level for the first time since 2021. Monday's open will also reflect Saturday's Politburo statement signaling additional fiscal stimulus, including a new round of consumer-electronics subsidies, infrastructure bonds, and targeted property-sector support measures expected to be unveiled at the May National People's Congress standing committee meeting.
CSI 300 futures traded in Singapore overnight implied a 2.8% rise for mainland Chinese equities. Foreign investor flows into A-shares via Stock Connect totaled $4.8 billion last week — the largest single-week inflow since January 2024 — and analysts at Morgan Stanley expect that pace to accelerate. Strategist Laura Wang raised her year-end MSCI China target to 92 from 78.