Asia report: Stocks mixed as oil tumbles, yen jumps

(Sharecast News) - Asian equity markets finished mixed on Monday despite a sharp drop in oil prices, with FX intervention in Japan weighing on the Nikkei 225 in Tokyo and continued volatility in the South Korean chip sector weighing on the KOSPI. The Nikkei 225 finished 0.9% lower and the KOSPI dropped 5.1%, while losses were also seen in Shanghai (-0.6%) and Singapore (-0.3%). However, Bombay's Sensex gained 0.9%, Taiwan's Taiex rose 0.6% while the Hang Seng in Hong Kong climbed 0.5%.

Investors were digesting yet more wild swings in energy markets, with Brent crude sinking 4.8% to $83.68 a barrel after Donald Trump said talks would resume with Iran on Monday, as Washington refrained from carrying out new strikes against Tehran over the weekend.

However, investors are likely to await news of more tangible progress in negotiations before getting their hopes up, according to analysts.

Russ Mould, investment director at AJ Bell, was also cautious. "The market has been here before, and a more concerted fall in crude and in government bond yields will require greater evidence that a lasting resolution can be forthcoming this time round," he said.

Over in Japan, a stronger yen was weighing on sentiment after the US and Japan confirmed they intervened to counteract the currency's 40-year low against the US dollar seen last week.

"Japan's equity market is now having to balance cheaper oil, which is helpful for import costs, against a stronger yen and ongoing intervention risk, which are less helpful for exporters. That trade-off is likely to remain live as long as authorities keep leaning against excessive currency weakness," said Patrick Munnelly from Tickmill Group.

The yen jumped against the dollar, with USD/JPY falling as low as 155.2, compared with the 158-161 range seen on Friday and the 164 level reached last week.

In Seoul, chip makers fell once again - heavyweight Samsung Electronics sank 9% - as the KOSPI pulled back after its best one-day performance in history (+18%) on Friday.

"South Korea has become the cleanest high-beta proxy for the AI capex trade, and the recent swings suggest positioning is still fragile. Investors are no longer simply buying AI exposure; they are questioning whether the earnings cycle can justify the scale of investment," Munnelly said.