Asia-Pacific Markets Mixed as China Holds Rates Steady, Middle East Tensions Escalate
- Rahaman Hadisur
- 1 hour ago
- 2 min read
Hadisur Rahman, JadeTimes Staff
H. Rahman is a Jadetimes news reporter covering Asia
Asia-Pacific markets ended Friday on a mixed note as investors digested China’s decision to hold key interest rates steady and monitored rising geopolitical tensions between Israel and Iran. The regional volatility was further influenced by U.S. President Donald Trump's contemplation of potential military support for Israel, which could escalate conflict with Tehran.
China’s central bank, the People’s Bank of China (PBOC), held its benchmark loan prime rates (LPR) unchanged as expected. The 1-year LPR remained at 3.0% and the 5-year at 3.5%, in line with analysts’ forecasts. In response, mainland China’s CSI 300 Index closed flat at 3,846.64, while Hong Kong’s Hang Seng Index gained 1.26% to end the day at 23,530.48.
Japan’s Nikkei 225 dropped 0.22% to close at 38,403.23, while the broader Topix index fell 0.75% to 2,771.26. The market decline came as core inflation in Japan climbed to 3.7% in May, marking the highest level since January 2023 and surpassing expectations of 3.6%.
South Korea’s Kospi Index surged 1.48% to close at 3,021.84 its highest level since December 2021 after breaking through the 3,000 mark earlier in the session. The rally follows growing optimism around newly elected President Lee Jae-myung’s proposed capital market reforms. The small-cap Kosdaq also climbed 1.15% to 791.53.
South Korea has been one of the region’s standout performers in 2025, with the Kospi up 25.94% year-to-date. In comparison, the Hang Seng Index has gained 16.85%, India’s Nifty 50 is up 6%, while Japan’s Nikkei 225 and China’s CSI 300 have declined 3.52% and 2.24%, respectively.
Australia’s S&P/ASX 200 index slipped 0.21% to close at 8,505.50. Meanwhile, Indian equities saw healthy gains, with the Nifty 50 rising 1.05% and the BSE Sensex up 1.13% as of 1:40 p.m. IST.
U.S. President Trump is reportedly considering military action in support of Israel, amid escalating tensions with Iran. A final decision is expected within two weeks. The geopolitical uncertainty has added a $10 risk premium to oil prices, according to Dan Yergin, Vice Chairman of S&P Global.
U.S. crude slipped 0.19% to $75 per barrel, while global benchmark Brent fell 2.73% to $76.71 per barrel by mid-afternoon Singapore time.
Yergin warned that any disruption in the Strait of Hormuz through which a significant portion of the world’s oil supply flows could have serious consequences for Asia, particularly for China and India, two major buyers of Iranian oil.
Other Economic Highlights
South Korea’s Producer Price Index rose 0.3% year-on-year in May, the slowest increase since July 2023.
Philippines Central Bank cut rates by 25 basis points to 5.25% and may cut again in August or October, depending on how the Middle East crisis evolves.
Gold Prices fell 0.45% to $3,355.08 and are on track for a weekly decline, reflecting expectations of fewer rate cuts by the U.S. Federal Reserve.
U.S. markets were closed Thursday in observance of the Juneteenth holiday, but futures slipped in early Asian trading as investors continued to monitor developments in the Middle East.
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