Japanese stocks poised to rise as Trump signals US-Iran deal

Japan’s stock market is gearing up for another leg higher after President Trump signaled that a deal with Iran is within reach. For a country that imports nearly all of its oil, fewer Middle East tensions translate almost directly into cheaper energy costs and fatter corporate margins.

The Nikkei 225 has already been responding to every breadcrumb of progress on the US-Iran front. On May 25, the index surged 2.9%, closing at 65,158.19 points after Trump described negotiations as moving in an “orderly and constructive” manner.

Why Japan cares more than most

When tensions flared earlier in the year, the Nikkei showed mixed reactions through March and April as Trump toggled between hawkish rhetoric about Iran strikes and softer language about energy infrastructure cooperation.

Then came the June 11 escalation-that-wasn’t. Trump canceled planned military strikes against Iran and indicated that an agreement was imminent. Oil prices began falling as fears of supply disruptions faded, and Japanese stocks caught a bid almost immediately.

The Bitcoin connection

Bitcoin rose approximately 5% to around $64,000 on June 8 following Trump’s positive signals regarding the Iran deal. After a May 23 announcement about Iran-deal progress, Bitcoin recovered previously lost ground. When traditional markets feel safer, capital flows into higher-beta assets. Bitcoin has increasingly behaved like a risk appetite barometer rather than the uncorrelated hedge it was once marketed as.

What this means for investors

The crypto angle deserves some skepticism. Bitcoin’s correlation with risk assets means it benefits from the same tailwinds pushing Japanese stocks higher, but that correlation cuts both ways. If the Iran deal falls apart, the same investors buying Bitcoin on optimism will likely sell it on fear.

The risk that nobody wants to talk about is straightforward: Trump’s negotiating style is unpredictable. The same president who canceled military strikes on June 11 had been escalating rhetoric just weeks earlier. Markets are pricing in a deal, which means any breakdown in talks would hit both Japanese equities and crypto with equal force.

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