Yen slides to 157.70 as Japan's ruling party backs food tax cut; KOSDAQ curb activated for third straight session on KRW 354 bln institutional buying.
Middle East tensions resurfaced on Monday, complicating the fragile optimism that had briefly lifted markets after Trump's weekend decision to hold off on fresh strikes against Iran. A senior adviser to Iran's Supreme Leader warned that American vessels and forces would face serious risk, including casualties, if the current blockade situation continues, and explicitly ruled out any second shipping corridor opening through the Strait of Hormuz. That rhetoric was accompanied by unconfirmed Iranian media reports of attacks on US bases in Kuwait, while Fox News reported that Iranian Foreign Minister Araghchi had arrived in Iraq, a development that could point toward regional diplomatic manoeuvring even as the security picture darkened.
The most concrete escalation came via the UK Maritime Trade Operations body, which reported a cargo vessel had been hit by an unknown projectile roughly 20 nautical miles northeast of Al Khasab, Oman. That projectile was later identified as a missile, which disabled the vessel's engine room. Separately, Nour News, an outlet with ties to Iran's Supreme National Security Council, reported the crash of an F-35B fighter jet, though this account saw no corroboration from other sources at the time of writing. Oil prices ticked modestly firmer in response to the fresh escalation, reversing a portion of Monday's steep selloff as the market once again priced in supply risk around the world's most critical chokepoint.
Currency markets carried their own theme, with the yen extending its slide as Japan's fiscal position came back into focus. Nikkei media reported that the ruling party has backed cutting the food consumption tax from 8% to 1% for a two year period starting next April, alongside roughly ¥600 billion a year in cash transfers to households, with funding for the package still unspecified. That combination of tax cuts and spending commitments added to existing concerns over Japan's fiscal trajectory, helping push USD/JPY to session highs around 157.70. In contrast, the Australian dollar outperformed after data showed household spending climbed more than expected in June, reinforcing the picture of resilient consumer demand a week ahead of the Reserve Bank's policy meeting, where rates are widely expected to be left unchanged.
Asia-Pacific equities began the session on a strong footing, drawing support from Wall Street, where the Dow notched a record close as lower oil prices and yields followed Trump's strike cancellation and talk of renewed US-Iran negotiations. South Korea's Kospi opened around 1.2% higher, with SK Hynix up more than 3% and Samsung Electronics gaining over 2%, before extending gains to as much as 2% intraday. Japan's Nikkei 225 opened a more modest 0.3% higher. Both indices lost momentum as the session progressed, with the Nikkei and Kospi softening from their early highs. The Kosdaq told a different story entirely, surging more than 5% as the Korea Exchange activated a buy-side-only trading curb at 10:47:51 KST, pausing programmatic trading. Institutions were heavy net buyers to the tune of KRW 354 billion, and this marked the third consecutive session the curb has been triggered, following activations at the end of last month and again the previous day.
Elsewhere, Telegram briefly vanished from Apple's App Store worldwide without explanation, leaving existing installations functional but blocking new downloads and updates. The app was later reinstated, bringing a swift end to an episode that had initially raised concerns among crypto traders and community managers who rely heavily on the platform.
In company news, Amazon Chair Jeff Bezos sold $4.07 billion worth of his shares in the company, a disposal that will likely draw scrutiny given its scale. Palantir Technologies, meanwhile, posted a standout quarter, with revenue up 93% year-over-year to around $1.9 billion and US commercial revenue surging 149%. The company raised its full-year guidance across revenue, operating income and free cash flow, citing surging demand tied to what it describes as the sovereign AI theme.
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