• BOJ Steals the Spotlight with a 31-Year High: The Bank of Japan shook up the financial world by hiking its benchmark policy rate to 1%, a level not seen since 1995. Despite the aggressive move, the Nikkei 225 jumped 0.9% to explode past a historic, all-time peak above 70,000, while the Yen edged up slightly to 160.215 against the dollar.
• Iran Peace Deal Euphoria Fades: The explosive optimism from Monday’s initial announcement of the U.S.-Iran interim peace deal is beginning to cool. Markets are transitioning into a more cautious, measured tone as investors recognize the immense hurdles ahead.
• The Strait of Hormuz Reality Check: Shippers across Europe and Asia warned that rebuilding trust and safely resuming transit through the vital Strait of Hormuz waterway could take weeks, not days. Reflecting this pragmatism, Brent crude futures slid another 0.3% to $82.90 a barrel, sitting at a three-month low.
• Geopolitical Friction Points Remain: While the diplomatic breakthrough offers massive relief, analysts at Westpac warned that its durability will be heavily tested. Major sticking points—including the ultimate fate of Iran’s nuclear program and a potential diplomatic collision course between Washington and Israel—keep investors on guard.
• Mixed Performance Across the Region: While South Korean shares rallied a strong 2.3%, Hong Kong markets lagged behind, weighed down by disappointing retail sales and fixed-asset investment data coming out of China.
• Gold Stays Resilient: Safe-haven gold refused to give back its recent gains, moving 0.4% higher to $4,321.22 an ounce, as a more stable macroeconomic outlook and softening inflation fears continue to provide a floor for the precious metal.

What’s Next?

• We are witnessing a truly historic script flip in global macroeconomics. The Bank of Japan—the world’s historical bastion of negative and ultra-low rates—just pushed its policy rate to 1% for the first time in over three decades. What’s even more fascinating is the market’s reaction: instead of panicking over tighter monetary policy, the Nikkei 225 launched itself to an absolute all-time high above 70,000. It seems investors are treating this hike as a massive vote of confidence in the underlying strength and reflation of the Japanese economy.