Iran strikes fuel oil surge; Asia stocks diverge mid-session
As of 2026-07-08 12:00 SGT
Key points
- U.S. Central Command says it completed strikes on more than 80 Iranian targets — including 60-plus IRGC vessels — in retaliation for tanker attacks in the Strait of Hormuz; Iran's IRGC then reported counter-strikes on 85 U.S. military sites in Bahrain and Kuwait and claimed it downed an MQ-9 drone
- WTI crude jumped to $72.26 (+2.58%), well above yesterday's high of $69.21, after the U.S. Treasury also revoked authorizations for Iranian oil sales; the Strait of Hormuz threat level was raised to "Severe"
- Nikkei 225 recovered from a 1,100-point intraday loss to trade at 68,060 (–0.29%), helped by a reversal in the KOSPI and Nasdaq 100 futures turning positive (+0.32%)
- Hang Seng rose 2.43% to 24,068, led by Hang Seng Tech (+4%+); mainland Shanghai Composite gained 0.52% to 4,011.05 with STAR 50 up 3.13% on AI compute and semiconductor strength
- RBNZ raised its OCR by 25 bp to 2.50% — the first hike in three years — and Governor Breman flagged further tightening remains possible, sending NZD sharply higher
Market snapshot
| Instrument | Level | Change |
|---|---|---|
| USD/JPY | 162.34 | +0.14% |
| EUR/USD | 1.1417 | +0.07% |
| Nikkei 225 (intraday) | 68,060 | -0.29% |
| Hang Seng (intraday) | 24,068 | +2.43% |
| Dow futures | 53,146 | -0.10% |
| S&P 500 futures | 7,556.75 | +0.07% |
| Nasdaq 100 futures | 29,487 | +0.32% |
| Gold futures | 4,139.80 | -0.42% |
| WTI crude | 72.26 | +2.58% |
| Bitcoin | 62,698 | -0.98% |
| US 10-yr yield | 4.529% | +5.0bp |
Foreign exchange — USD/JPY holds near 40-year high as intervention watch caps topside
USD/JPY edged up to 162.34 (+0.14%), trading in a narrow 162.09–162.46 intraday range. A brief risk-off bid for the yen at the open faded quickly as the 10-year U.S. Treasury yield climbed to 4.529% (+5.0 bp), keeping the dollar supported. EUR/USD is essentially unchanged at 1.1417, drifting between 1.1403 and 1.1419 — the tightest range in days. The PBOC set its USD/CNY mid-point at 6.8077, slightly weaker than the 6.8018 Reuters estimate, allowing the onshore yuan a modest drift lower. Southbound stock-connect flows topped HK$10 billion for the session, underpinning HKD demand. For the rest of the Asia session and into the European open, USD/JPY is likely to remain pinned to the 162 handle, with verbal intervention risk capping any test of the 162.46 intraday high.
Equities — Tokyo pares losses, Hong Kong and Shanghai rebound sharply
Nikkei 225 plunged as much as 1,100 points in morning trade — driven by the Samsung earnings-led chip selloff that also weighed on Korean markets — before staging a recovery in the afternoon session to 68,060 (–0.29%). The rebound was partly mechanical: KOSPI reversed from a near-4% gap lower to positive territory, and Nasdaq 100 futures swung to +0.32%. Tokyo Electric Components remained a drag, with Tokyo Electron alone accounting for around 146 index points of the decline. Hang Seng surged 2.43% to 24,068 with Hang Seng Tech up more than 4%, led by ZhipuAI (+8–13%), CMIC (+6%), and Lenovo (+8%). Shanghai Composite finished the morning session at 4,011.05 (+0.52%), reclaiming the 4,000 level, while the STAR 50 jumped 3.13% on AI compute and chip demand. Ahead of tonight's NY open and the FOMC minutes release (02:00 SGT 09 July), Asia's afternoon session is likely to see consolidation, with geopolitical risk premium and higher bond yields limiting any sustained advance in Japanese equities.
Macro — Japan 10-yr yield hits 29-yr high; RBNZ hikes for first time in three years
Japan's 10-year government bond yield touched 2.860%, the highest level since May 1997, as fiscal expansion concerns and a fresh oil-price shock stoked inflation anxiety. Reports that the government had proposed revised monetary-policy language in the "Honebuto" fiscal plan to avoid giving the impression of leaning on the Bank of Japan added nuance, though market participants remained wary of the underlying fiscal trajectory. Elsewhere, the RBNZ raised its OCR from 2.25% to 2.50%, with Governor Breman noting that "inflation may have already peaked" but stressing "the uncertainty around the timing of further rate adjustments has increased." Tonight's FOMC minutes (02:00 SGT 09 July) will be the pivotal macro event, with any hawkish tone on the pace of tightening adding upward pressure to U.S. yields and testing the resolve of equity bulls.
Commodities — WTI surges above prior-day range; gold retreats from near record
WTI crude rose to $72.26 (+2.58%), surpassing yesterday's intraday high of $69.21 following the exchange of U.S. air strikes and Iranian IRGC counter-strikes. The U.S. Treasury's revocation of Iranian oil sales authorizations compounded the supply-risk premium. A Qatari LNG carrier was also reported damaged in the Strait, raising concerns beyond crude alone. Gold futures eased to $4,139.80 (–0.42%), pulling back from yesterday's session high of $4,199.70. The geopolitical backdrop provides a floor, but rising U.S. yields and a firmer dollar are limiting upside near the $4,200 level. Through the rest of the afternoon and into the European open, further escalation headlines from the Strait of Hormuz carry the most near-term price risk for both crude and gold.
Geopolitics — U.S.–Iran exchanges mark the sharpest Hormuz escalation in years
CENTCOM confirmed it struck more than 80 Iranian targets, describing the operation as a "powerful strike" in response to Iran's attacks on tankers using a protected U.S. Navy corridor through the Strait. Iran's IRGC countered by claiming it destroyed 85 U.S. military installations at Bahrain's Fifth Fleet headquarters and Kuwait's Ali Al Salem Air Base, and shot down a U.S. MQ-9 "Reaper" drone. Iran's Parliament Speaker Ghalibaf accused the U.S. of breaching the Islamabad MoU on five counts. The U.S. also revoked Iranian oil sanctions waivers, effectively re-imposing a full crude export blockade. At the NATO Ankara summit, President Trump hinted at withdrawing troops from Europe while pressuring allies on defence spending — deepening the transatlantic rift on how to handle Iran. The Strait of Hormuz threat level has been raised to "Severe," and shipping data shows tanker transits declining following successive attack incidents.
Upcoming events
| Time (SGT) | Region | Event | What to watch |
|---|---|---|---|
| 07/09 00:40 | CH | SNB Chairman Schlegel Speaks | Franc outlook and rate trajectory |
| 07/09 02:00 | US | FOMC Meeting Minutes | Pace of tightening, inflation discussion |
| 07/09 20:30 | US | Unemployment Claims (forecast 218K) | Whether labor cooling continues |
| 07/10 20:30 | CA | Employment Change (forecast 11.2K) | Canada labor market direction |
| 07/10 20:30 | CA | Unemployment Rate (forecast 6.6%) | Whether unemployment is stabilizing |