Asian stocks reverse from record highs after U.S.-Iran signing collapses

Nikkei 225 hit a fifth straight record high and KOSPI topped 9,300 for the first time before both indexes reversed lower, according to Reuters.marketscreener
The Swiss Foreign Ministry confirmed Friday’s planned U.S.-Iran signing ceremony was canceled after VP JD Vance withdrew from the trip.marketscreener
Despite the pullback, the Nikkei posted a weekly gain of roughly 7% and the KOSPI about 9.5%, driven by semiconductor stocks and ceasefire optimism.marketscreener

Japan and South Korea Stocks Hit Record Highs Before Reversing on Iran Deal Snags

Stock markets in Japan and South Korea surged to fresh record highs on Friday morning before reversing course as the formal signing of a U.S.-Iran peace deal hit an unexpected obstacle, with U.S. Vice President JD Vance pulling out of a planned trip to meet Iranian negotiators in Switzerland.

Japan’s Nikkei 225 rose as high as 71,952 in morning trade — its fifth consecutive record session — before turning lower to end the day down about 0.6%, according to Reuters. South Korea’s Kospi climbed past 9,300 for the first time during intraday trading before profit-taking dragged it lower to close down 0.13%.chosun

Peace Deal Uncertainty Triggers Reversal

The pullback came after the Swiss Foreign Ministry confirmed that talks planned for Friday would not take place, Reuters reported. The session in Switzerland had been intended as the formal signing ceremony for the U.S.-Iran memorandum of understanding, which was agreed upon last weekend and aimed to extend the ceasefire for 60 days and reopen the Strait of Hormuz.axios

Oil tankers had already begun sailing through the Strait of Hormuz after the United States lifted its blockade on Iran on Thursday. But the collapse of Friday’s planned ceremony sent crude prices higher, with U.S. West Texas Intermediate rising 0.8%, though oil remained on track for steep weekly declines.marketscreener

A Historic Week Despite Friday’s Losses

Even after the reversal, both indexes posted substantial weekly gains. The Nikkei was set for a weekly advance of roughly 7%, while the Kospi was poised for a gain of about 9.5%, according to Reuters. The rally began Monday after U.S. President Donald Trump announced on Truth Social that a deal had been reached, sending the Nikkei above 69,000 for the first time.japantimes

Samsung Electronics and SK Hynix helped drive gains in Seoul throughout the week, with semiconductor stocks benefiting from both the geopolitical easing and a rally in U.S. chip shares. Bloomberg noted that an index of Asian shares fell after a five-day rally that took it to record highs, as holidays in the U.S., China, Hong Kong, and Taiwan drained liquidity.chosun

The diplomatic setback underscored warnings from analysts that the path to a durable peace remains uncertain. “Any failure at the 19 June signing to produce a durable and transparent agreement could rapidly reverse the recent decline” in oil prices, Fabien Yip, market analyst at IG, had cautioned earlier in the week.malaymail