On the morning of March 30, Asia-Pacific markets experienced significant declines. At the time of reporting, the Nikkei 225 index had plunged by over 2,500 points, a drop of 4.80%. South Korea's KOSPI index fell nearly 4%, while the MSCI Asia-Pacific index declined by more than 2%.
Market analysts noted that tensions with Iran showed no signs of easing over the weekend, causing oil prices to surge further on Monday. This is particularly concerning for Japan and South Korea, as both nations are heavily reliant on energy imports from the Middle East.
According to a Xinhua News Agency report, former U.S. President Donald Trump stated in an interview with British media on March 29 that he wanted to "seize" Iran's oil and did not rule out occupying Kharg Island, a key hub for Iranian oil exports.
In his interview with the Financial Times, Trump expressed a desire to "take the oil" from Iran, similar to his approach in Venezuela. However, he also suggested that a ceasefire agreement with Iran "could" be reached soon. Trump mentioned that indirect negotiations between the U.S. and Iran, facilitated by Pakistan as an intermediary, were "progressing well." When asked about the possibility of a ceasefire agreement being reached in the coming days and the reopening of the Strait of Hormuz, Trump provided no specific details. He stated, "We have about 3,000 targets left; we've already bombed 13,000 targets, with several thousand more to strike. An agreement could be reached very soon."
Separately, according to a CCTV News report, a petrochemical plant in Tabriz, East Azerbaijan Province, Iran, was attacked on the morning of March 30.
Additionally, several Iranian government officials voiced their positions on March 29, stating that while the U.S. has proposed negotiations, it continues to issue military threats. They emphasized that Iran's armed forces are prepared to respond to any potential military action. Should the U.S. launch a ground invasion, Iran will respond "decisively."
Japanese and South Korean stock markets fell sharply on the morning of March 30. At one point, both the KOSPI and Nikkei 225 indices saw intraday declines exceeding 5%. By the time of reporting, the Nikkei 225 was down 4.80%, and the KOSPI had fallen 3.97%. Among individual stocks, SoftBank Group fell nearly 8%, Hitachi dropped close to 6%, SK Hynix declined over 5%, Toyota Motor fell nearly 5%, and Samsung Electronics dropped almost 4%.
Investors are bracing for a prolonged conflict in the Gulf, which has already driven oil prices toward a record monthly increase and raised risks of surging inflation and economic recession across much of the globe.
Madison Cartwright, Senior Geoeconomic Analyst at Commonwealth Bank of Australia, commented, "Iran controls the Strait of Hormuz, possesses the capability to disrupt global energy and grain markets, and maintains ongoing missile and drone capabilities. This gives it little incentive to concede, thereby forcing the U.S. to escalate. We expect the Iran conflict to last at least until June, with the risk of prolonged hostilities increasing."
International media have pointed out that the blockade of the Strait of Hormuz has already led to sharp increases in the prices of oil, natural gas, fertilizers, plastics, and aluminum, with aircraft and shipping fuel costs also rising. Prices for food, pharmaceuticals, and petrochemical products are also expected to climb.
Bruce Kasman, Head of Economic Research at J.P. Morgan Global Research, warned, "The longer the Strait of Hormuz remains closed, the more severely buffer inventories will be depleted, potentially triggering sharp increases in crude oil, natural gas, and other commodity prices. If the strait remains closed for another month, it could push oil prices toward $150 per barrel and constrain supplies for industrial energy consumers."
The threat of inflation has prompted investors to nearly universally revise their interest rate outlooks upward. Markets now anticipate the Federal Reserve will tighten policy by 12 basis points this year, whereas a month ago, expectations were for a 50 basis point rate cut.
Fed Chair Jerome Powell will have an opportunity to share his views during an event later on Monday, and influential New York Fed President John Williams is also scheduled to speak.
U.S. retail sales, manufacturing, and employment data to be released this week will provide the latest insights into economic conditions. After an unexpected loss of 92,000 jobs in February, employment is forecast to increase by 55,000 in March, keeping the unemployment rate steady at 4.4%.
In the European Union, data due on Tuesday are expected to show the annual inflation rate jumping to 2.7% in March from 1.9% in February, although core prices should remain more stable.
The impending energy shock, combined with pressure on fiscal budgets from rising borrowing costs and increased defense spending needs, has heavily impacted sovereign bond markets. So far this month, the yield on the 10-year U.S. Treasury note has risen approximately 47 basis points to 4.428%, while the two-year yield has climbed 54 basis points.
An Iranian petrochemical plant was attacked on March 30. The head of the emergency department in East Azerbaijan Province stated that the situation was under control and there had been no leakage of toxic substances.
The Israeli Defense Forces announced on the evening of March 29 that dozens of Israeli Air Force fighter jets had completed another round of airstrikes on infrastructure in Tehran earlier that day.
The Israeli military stated that this round of strikes focused on further disrupting Iran's weapons production capabilities. Over 120 munitions were dropped on facilities used for weapon development and production. The military also targeted sites for storing and launching ballistic missiles, as well as several air defense facilities. Israeli attacks on Tehran's military industry continue.
That same evening, Brigadier General Seyed Majid Mousavi, Commander of the Aerospace Force of Iran's Islamic Revolutionary Guard Corps, posted on social media that retaliatory actions targeting infrastructure attacks were ongoing. Mousavi indicated that the operations involved the Neot Hovav industrial area in Israel, a refinery, two steel plants, and two large aluminum facilities. He stated that the strikes were continuing.
Several Iranian government officials reiterated on March 29 that while the U.S. proposes talks, it simultaneously issues military threats. They affirmed that Iran's armed forces are ready to counter any potential military action and would respond "decisively" to a U.S. ground invasion.
Iranian Foreign Ministry spokesman Nasser Kanaani stated that proposals delivered to Iran by mediators on behalf of the U.S. were extreme and unreasonable. These proposals concerned Iran's fundamental rights and did not reflect goodwill or a serious diplomatic approach. He added that Iran would use all means to prevent further attacks and that its military actions would not target Arab nations, focusing solely on U.S. military bases and assets used for operations against Iran.
Mohammad Bagher Ghalibaf, Speaker of the Iranian Parliament, stated that the U.S. publicly signals negotiations while secretly planning a ground offensive and has put forward a so-called "15-point plan" to end the conflict, attempting to achieve objectives unattainable through warfare. Ghalibaf emphasized that the conflict is at a critical juncture, with U.S. aircraft and aircraft carriers suffering significant losses and Israel also being struck in what he described as "precise and groundbreaking" operations. He stressed that the U.S. seeks Iran's surrender, which Iran will never accept.
Iranian Army spokesman General Shahin Taghikhani stated that the core issue between the U.S. and Iran is not the nuclear program but rather Iran's sovereignty and independence.
Furthermore, Iranian Navy Commander Rear Admiral Shahram Irani stated that Iran is closely monitoring the position and movements of the U.S. Navy's USS Lincoln carrier strike group. Should the strike group come within range, Iran would launch missiles from the coast toward the sea.
In response to recent U.S. threats of ground operations against Iran, a spokesperson for the Khatam al-Anbiya Central Headquarters of the Iranian Armed Forces issued a statement on March 29 warning that "if these threats are acted upon, Iran's armed forces will respond firmly."
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