Renewed missile strikes in the Strait of Hormuz and a tech-driven equity selloff in Asia overshadowed softer Japan wage data, keeping USD/JPY under pressure amid shifting risk sentiment.
Market Overview
Asian markets opened under pressure on Tuesday, with the KOSPI plunging 6% as Samsung shares tumbled over 8% despite a record quarterly profit. The selloff spread to memory chip peers Micron and Sandisk, breaking ranks with Wall Street's recent gains. Renewed missile attacks in the Strait of Hormuz by Iran's military added geopolitical tension, while softer-than-expected Japan wage data raised questions about the Bank of Japan's tightening trajectory.
Hormuz Attacks Raise Supply Concerns
U.S. officials confirmed Iran fired at least two missiles at commercial vessels in the Strait of Hormuz after a one-week de-escalation pact expired. A loaded LNG tanker was reportedly struck and set ablaze, though details remain unverified. The attacks threaten the recent U.S.-Iran agreement and heighten risks of broader conflict. Oil prices edged higher, while gold retreated from two-week highs as investors awaited the Fed's June minutes.
Samsung Selloff Drags KOSPI Lower
Samsung's 8.2% drop weighed heavily on the KOSPI despite a 152% year-on-year surge in Q2 operating profit. Analysts cited concerns over employee bonus provisions and leveraged ETF volatility. The tech sector's weakness extended to the Nasdaq, which underperformed in U.S. futures trading.
BOJ Policy Outlook Intact Despite Wage Miss
Japan's May wage data missed estimates, though household spending exceeded forecasts. The mixed signals are unlikely to derail the BOJ's tightening path, with markets pricing in a potential rate hike by December. USD/JPY slipped below 162.00, reflecting growing yen risk amid global uncertainty.
PBOC Expands Bond Connect Quota
People's Bank of China Governor Pan Gongsheng raised the Southbound Bond Connect quota to 800 billion yuan, signaling continued support for Hong Kong's financial integration. The move comes amid reports of a Chinese economist's detention following a pessimistic lecture, adding to market caution.
Trader Implications
USD/JPY remains a key focus for Forex traders, with technical support near 161.50 under scrutiny. Geopolitical risks in Hormuz could spur short-term volatility in oil-linked currencies. Meanwhile, the Fed's June minutes may offer clues on Chair Warsh's policy stance, influencing broader dollar dynamics.
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