The Nikkei average rose by about 500 yen [1] at the start of trading Monday after U.S. President Donald Trump postponed a large-scale attack on Iran [1].

This shift in military posture reduced immediate geopolitical tensions in the Middle East, which typically trigger volatility in energy markets and global equity indices. The decision provided a momentary reprieve for investors concerned about a wider regional conflict.

Market analysts said the rise in the Nikkei was driven by a decline in crude oil futures [1]. As the threat of a major strike receded, the downward pressure on oil prices encouraged investors to shift capital back into equities. This movement suggests that the Tokyo market remains highly sensitive to U.S. foreign policy decisions and their subsequent impact on energy costs.

However, the impact on energy markets appears inconsistent across different reports. While some sources indicated that oil futures fell following the postponement [1], other reports noted varying trends in crude prices. One report mentioned a one percent increase in futures on July 9 [2], while another cited WTI crude rising eight percent to the 76-dollar range [3].

Despite these contradictions in oil price data, the initial reaction at the Tokyo Stock Exchange was positive. The opening surge reflects a broader market relief that a direct military confrontation was avoided for the time being. Traders are now monitoring whether this postponement represents a long-term diplomatic shift or a temporary tactical delay.

“The Nikkei average rose by about 500 yen at the start of trading Monday”

The correlation between the Nikkei's opening and the postponed U.S. strike underscores the vulnerability of Japanese equities to global energy shocks. Because Japan imports the vast majority of its energy, any perceived reduction in Middle East instability typically lowers projected costs and boosts investor confidence, regardless of the long-term geopolitical outcome.