Asian stock markets dip as geopolitical risks weigh on investors

• Brent crude rose 1.3% to $101.60/barrel after US-Iran military clashes threatened their month-long ceasefire, though both nations later signaled desire to avoid further escalation
• Japan's Nikkei fell 0.4% pressured by SoftBank losses after Arm Holdings warned of potential supply challenges for its new AI chip, despite the index gaining 4.5% for the week
• US April payrolls expected at 62,000 (down from 178,000 in March); Japan suspected of deploying nearly $70 billion in currency intervention as yen weakened to 156.9 per dollar

Market Summary: Asian Markets Dip on Geopolitical Tensions

Key Market Movements:

Asian equities retreated Friday despite a strong weekly performance. MSCI's broadest Asia-Pacific index and South Korea's KOSPI both fell 0.8%. However, Taiwan's benchmark gained 6.9% for the week, while Japan's Nikkei advanced 4.5%. Japan's Nikkei slipped 0.4% Friday, pressured by SoftBank losses.

Geopolitical Developments:

Brent crude surged 1.3% to $101.60 per barrel following renewed U.S.-Iran military exchanges on Thursday, described as the most serious challenge to their month-long ceasefire. While Iran reported conditions returned to normal and President Trump confirmed the ceasefire remains in effect, escalation risks continue to support oil prices and raise inflation concerns.

Company-Specific News:

SoftBank weighed on Japanese markets after its majority-owned Arm Holdings warned of potential supply challenges for its new AI chip. This pressured sentiment despite broader strength in AI-linked stocks.

Currency Markets:

The Japanese yen traded at 156.9 per dollar, struggling despite suspected $70 billion in intervention by Japanese authorities since last Thursday. The euro stood at $1.1731, while China's yuan approached 6.8 per dollar, near its strongest level since 2023.

Data and Events Ahead:

Investors await the U.S. non-farm payrolls report, with economists forecasting 62,000 jobs added in April (down from 178,000 in March). UK local elections are also in focus, with poor Labour Party results expected to increase pressure on PM Keir Starmer and potentially impact gilt markets.

Other Markets:

U.S. 10-year Treasury yields held at 4.39%. Bitcoin traded at $79,460, approaching a sixth consecutive weekly gain.