Tokyo stocks rallied Tuesday morning, recovering from a massive global selloff after U.S. President Donald Trump announced a five-day delay on planned military strikes against Iranian energy infrastructure. The Nikkei 225 index climbed 2.1% to 52,613.37 as of 00:09 GMT, while the broader MSCI Asia Pacific Index rose 1.5%.
The market rebound follows a volatile Monday where Brent crude briefly spiked near $120 a barrel before plunging over 10% to settle just below $100. By Tuesday’s open, oil prices ticked back up 1% to trade around $101. Bond yields and the U.S. dollar also retreated slightly as safe-haven demands eased.
Geopolitical Tensions and Conflicting Narratives
President Trump cited “productive conversations” and “major points of agreement” as the catalyst for pausing the strikes. The delay temporarily walks back a 48-hour ultimatum issued over the weekend, which threatened the “obliteration” of Iranian power plants if the Strait of Hormuz remained closed.
However, Iranian officials publicly contradicted the U.S. narrative. Iranian Parliament Speaker Mohammad Bagher Ghalibaf explicitly denied that any negotiations occurred, characterizing the U.S. claims as “fake news” designed to manipulate financial and oil markets.
Ongoing Supply Chain Risks
The regional conflict, which escalated in late February, has effectively shut down the Strait of Hormuz, a maritime chokepoint that handles approximately 20% of global oil and natural gas exports.
Despite the temporary pause in direct military strikes, market analysts warn the underlying economic threats remain unresolved. Oxford Economics projects the Strait of Hormuz will likely remain impassable through May, sustaining ongoing supply chain and inflation risks for global markets.