Geopolitical fallout: Israeli attack on Iran sends Asia-Pacific markets down, Oil prices surge, U.S. futures fall

Asia stock markets trade in red on Friday, after Israel’s strike against Iran, escalating regional conflict, led to a decline in global markets. Israeli leaders pledged to continue operations until the threat is neutralized, while US President Trump’s tariff threats further dampened investor sentiment. The strikes, which reportedly targeted Iran’s nuclear facilities and military infrastructure, marked a major escalation in tensions between the two countries and fueled fears of a broader conflict in the Middle East. Bitcoin ( BTC-USD ) dropped to around $103,700, extending losses from recent sessions to hit a two-week low. Gold rallied jumped more than 1% to above $3,440 on Friday, marching toward record highs. Oil prices jumped more than 10%. U.S. West Texas Intermediate rose 10.21%, to $74.99 per barrel, while global benchmark Brent surged 10.28%, to $76.48 per barrel. Airline stocks under pressure: After Boeing’s 787 Dreamliners crashed in India . The incident raised fresh questions about the safety of Boeing’s planes. Japan ( NKY:IND ) fell 1.12% to below 37,700 on Friday, while the broader Topix Index lost 1.1% to 2,752, as Japanese equities declined for a second consecutive session due to escalating geopolitical tensions and global economic uncertainty. The Japanese yen appreciated toward 143 per dollar on Friday, rising for the third consecutive session. Japan’s industrial production fell 1.1% month-over-month in April 2025, exceeding the initial 0.9% estimated decline and contrasting with March’s 0.2% increase. It represents the second contraction in output this year. China ( SHCOMP ) fell 0.72% to below 3,390 while the Shenzhen Component dropped 1% to 10,130 on Friday, extending losses from the previous session, and the offshore yuan weakened to around 7.18 per dollar on Friday, reversing gains from the previous session. Meanwhile, China plans to sign a new economic agreement with 53 African nations, eliminating tariffs and broadening market access, benefiting least developed and middle-income nations, maintaining diplomatic relations. “China is ready to… welcome quality products from Africa to the Chinese market,” said the foreign ministry after a meeting in Changsha. On the trade front, investors digested news of a preliminary US-China agreement reached in London earlier this week. Investors are now turning their attention to a batch of key economic data set to be released next week, including figures on industrial output, retail sales, and the unemployment rate. Hong Kong ( HSI ) fell 0.71% to 23,831 in Friday morning trade, marking the second straight session of losses. India ( SENSEX ) fell 0.98% The Indian rupee fell to an eight-week low of 86.17 on Friday morning amid rising geopolitical tensions and trade uncertainty. Australia ( AS51 ) fell 0.40% to around 8,545 in early Friday trading, extending losses from the previous session. The Australian dollar weakened toward $0.649 on Friday, reversing gains from the previous session. Looking ahead, attention turns to Australia’s May employment data, due next week. In the U.S., on Thursday, all three major indexes ended higher as encouraging corporate earnings and cooling inflation offset lingering trade uncertainties. On Thursday, U.S. President Donald Trump signaled a possible hike in auto tariffs, saying it could push automakers to invest more in the U.S. “I might go up with that tariff in the not too distant future,” Trump said. “The higher you go, the more likely it is they build a plant here.” Looking ahead, markets are focused on the upcoming University of Michigan consumer sentiment report for June. U.S. stock futures declined more than 1% on Friday on Middle East conflict: Dow -1.40% ; S&P 500 -1.54% ; Nasdaq -1.74% . Currencies: ( JPY:USD ), ( CNY:USD ), ( AUD:USD ), ( INR:USD ), ( HKD:USD ), ( NZD:USD ). More on Asia: Japan’s factory output sees larger-than-expected decline, down 1.1% sequentially Japan’s producer prices rise 3.2% Y/Y in May, the least in 8 months China’s May CPI declines fourth consecutive month, PPI deflation eases to two-year low China’s trade surplus widens amid weaker exports and deeper import slump Japan’s Q1 GDP revised upward, showing no growth but avoids contraction

Source: Seeking Alpha