Asia-Pacific equities seen opening weaker, following Wall Street declines amid rising oil prices driven by Iran–U.S. geopolitical tensions

Asia-Pacific equities are expected to open weaker on Thursday, tracking overnight declines on Wall Street amid escalating geopolitical tensions between the U.S. and Iran. The renewed concerns over potential disruptions to global oil supplies have pushed crude prices higher, adding pressure on regional markets. Investors remain cautious as the situation in the Middle East remains volatile, with fears of prolonged conflict and its impact on energy infrastructure and global supply chains.

The Nikkei 225 in Japan and broader Asia-Pacific indices have shown resilience in recent weeks amid optimism over a potential peace deal, but the fragile ceasefire and unresolved issues—such as the status of the Strait of Hormuz—continue to weigh on market sentiment. Oil prices, while down from recent peaks, remain significantly elevated compared to pre-conflict levels, contributing to inflationary pressures and complicating the outlook for global economic growth.

In currency markets, the U.S. dollar has gained strength against major currencies, including the yen, as investors seek safe-haven assets amid the uncertainty. The yen, however, has shown some stability following recent fluctuations, though speculation persists over potential Japanese government intervention to support its value.

With the U.S. non-farm payrolls report due later in the week, investors will be closely watching for further signals on the trajectory of monetary policy and inflation, which could influence market direction in the coming sessions.