Asian Markets Recap: Mostly Lower as Iran War Rattles Investors, Japan Closed for Holiday — March 20, 2026

Asia-Pacific markets mostly declined on Friday, March 20, 2026, as the ongoing U.S.-Iran war continued to rattle investor confidence. Geopolitical tensions escalated further with Iran’s retaliatory strike on Qatar’s largest gas plant, a broad commodities sell-off fueled recession fears, and diplomatic friction deepened as President Trump invoked Pearl Harbor during his first meeting with Japan’s Prime Minister Sanae Takaichi. Japan’s markets were closed for Vernal Equinox Day (春分の日).

Market Snapshot

Index	Close	Change	% Change
Nikkei 225 🇯🇵	CLOSED — Vernal Equinox Day
Hang Seng 🇭🇰	25,277.32	-223.26	-0.88%
Shanghai Composite 🇨🇳	3,957.05	-49.50	-1.24%
Shenzhen Component 🇨🇳	13,866.20	-35.37	-0.25%
CSI 300 🇨🇳	4,567.00	—	-0.35%
KOSPI 🇰🇷	5,781.20	+17.98	+0.31%
KOSDAQ 🇰🇷	1,161.52	—	+1.58%
S&P/ASX 200 🇦🇺	8,428.40	-69.40	-0.82%
TAIEX 🇹🇼	33,543.88	-145.80	-0.43%
Nifty 50 🇮🇳	23,114.50	+112.35	+0.49%
SET Index 🇹🇭	1,432.99	+15.54	+1.10%
Straits Times 🇸🇬	4,948.87	-18.74	-0.38%
KLCI 🇲🇾	1,720.71	-9.10	-0.53%
NZX 50 🇳🇿	12,989.99	-61.62	-0.47%

Data source: CNBC Asia Markets

Japan: Markets Closed, but Diplomacy Takes Center Stage

Japan’s stock markets were closed on Friday for Vernal Equinox Day (春分の日), a national holiday. However, the country remained in the spotlight as Prime Minister Sanae Takaichi met with U.S. President Donald Trump at the White House on Thursday — a meeting that produced an awkward diplomatic moment.

When asked why the U.S. did not inform allies before launching strikes against Iran on February 28, Trump said it was to maintain the element of surprise, adding: “Who knows better about surprise than Japan … Why didn’t you tell me about Pearl Harbor?” — a reference to the 1941 Japanese attack on the U.S. Pacific Fleet that drew America into World War II.

Takaichi appeared to draw a deep breath and lean back in her seat with an uneasy expression. Despite the diplomatic friction, Japan joined Britain, France, Germany, Italy, and the Netherlands in issuing a joint statement expressing readiness to “contribute to appropriate efforts to ensure safe passage through the Strait” of Hormuz.

Trump praised Japan for “stepping up,” though Takaichi had reportedly said Monday that there were no plans to dispatch naval vessels to the Middle East. Japan’s Self-Defense Forces are governed by its pacifist constitution, which renounces war and the threat or use of force. Market participants will be watching closely for any impact when the Nikkei reopens on Monday, as the index had already plunged 3.38% on Thursday before the holiday.

South Korea: A Rare Bright Spot

South Korea’s KOSPI rose 0.31% to 5,781.20, and the small-cap KOSDAQ surged 1.58% to 1,161.52 — making it one of the few outperformers in an otherwise risk-off session. The rebound came after Thursday’s sharp 2.73% decline, with bargain hunters stepping in on oversold conditions.

The Korean won remained relatively stable against the dollar, and investors appeared to take comfort from signals that the U.S.-Iran conflict might end sooner than feared, after Israeli PM Netanyahu stated that Iran had lost the ability to enrich uranium and produce ballistic missiles.

Greater China: Continued Selling Pressure

Hong Kong’s Hang Seng Index fell 0.88% to close at 25,277.32, extending losses for a second consecutive day. The Hang Seng Tech Index was the biggest drag, dropping 2.6%, with Xiaomi Corp falling more than 7%. The sell-off in Xiaomi came just a day after the company launched an updated electric vehicle model and announced plans to invest over $8.7 billion in artificial intelligence development over the next three years — a “sell the news” reaction.

On the mainland, the Shanghai Composite dropped 1.24% to 3,957.05 while the Shenzhen Component fell 0.25% to 13,866.20. The CSI 300 reversed earlier gains to close 0.35% lower at 4,567. China’s central bank (PBOC) held its benchmark lending rates steady for a 10th consecutive month, keeping the five-year loan prime rate at 3.5% and the one-year rate at 3%.

Australia & Southeast Asia: Broad Weakness

Australia’s S&P/ASX 200 dropped 0.82% to 8,428.40, dragged down by continued concerns over energy costs and their potential impact on the economy. The Australian dollar slipped slightly against the greenback, with AUD/USD at 0.707.

Across Southeast Asia, the picture was mixed:

• Singapore’s STI lost 0.38% to 4,948.87
• Malaysia’s KLCI fell 0.53% to 1,720.71
• Thailand’s SET Index bucked the trend, rising 1.10% to 1,432.99

Taiwan’s TAIEX also declined 0.43% to 33,543.88, while India’s Nifty 50 gained 0.49% to 23,114.50 and New Zealand’s NZX 50 fell 0.47% to 12,989.99.

Key Drivers: Iran War, Energy Shock & Recession Fears

1. Iran’s Retaliatory Strike on Qatar’s LNG Facility

The biggest catalyst for market anxiety was Iran’s attack on the world’s largest gas plant in Qatar, launched Thursday in retaliation for Israel’s strikes on Iran’s South Pars gas field. QatarEnergy CEO Saad al-Kaabi said the attacks had wiped out 17% of Qatar’s LNG export capacity for three to five years — a devastating blow to global energy supply.

2. $23 Billion Gulf Arms Sales

The Trump administration approved roughly $23 billion in weapons sales to the UAE, Kuwait, and Jordan, including $16 billion in air-defense systems, munitions and radar equipment, plus $7 billion in additional weapons to the UAE. For some deals, the government invoked the emergency clause of U.S. arms control law, bypassing the standard 30-day congressional review period. This signals the administration expects the conflict to continue and possibly escalate.

3. Broad Commodities Sell-Off & Stagflation Fears

Both precious and industrial metals fell sharply as investors worried about the impact of rising oil prices on the global economy. Gold tumbled nearly 6%, silver fell 8%, and industrial metals like copper (-2%) and palladium (-5.5%) came under heavy pressure.

Peter Boockvar, CIO at One Point BFG Wealth Partners, pointed to “demand destruction” — the phase where elevated energy costs alter spending habits of consumers and businesses, potentially leading to recession. The U.S. 10-year Treasury yield crossed 4.300%, reflecting inflation fears that are removing any hope of Fed rate cuts.

However, not all voices were bearish. Ed Yardeni of Yardeni Research wrote that “oil shocks are less likely to trigger the kind of sustained stagflation seen in the past,” and Fed Chair Jay Powell echoed this sentiment: “I would reserve the term stagflation for a much more serious set of circumstances.”

4. The Cuba Flashpoint

Adding to global geopolitical uncertainty, the U.S. Treasury Department blocked Cuba from receiving Russian oil as two tankers carrying Russian crude and gasoil headed toward Havana. Cuba, already suffering devastating blackouts under a U.S. oil blockade since Venezuela’s government was toppled in January, faces its biggest crisis since the collapse of the Soviet Union.

Commodities & Currencies

Commodity	Price	Change	% Change
Brent Crude	$109.46	+0.81	+0.75%
WTI Crude	$96.47	+0.33	+0.34%
Natural Gas	$3.137	-0.029	-0.92%
Copper	$5.459	-0.011	-0.19%

Currency Pair	Rate	Change	% Change
USD/JPY	158.63	+0.91	+0.58%
USD/CNY	6.886	-0.014	-0.20%
AUD/USD	0.707	-0.001	-0.17%
USD/INR	93.552	+0.661	+0.71%
USD/SGD	1.279	+0.002	+0.13%
USD/HKD	7.836	+0.003	+0.03%

Data source: CNBC Asia Markets

Wall Street Overnight: S&P 500 Below 200-Day Moving Average

Overnight on Wall Street, the major averages posted their fourth consecutive losing week:

• Dow Jones: 46,021.43 (-0.44%)
• S&P 500: 6,606.49 (-0.27%) — now below its 200-day moving average
• Nasdaq Composite: 22,090.69 (-0.28%)

LPL Financial chief technical strategist Adam Turnquist warned that “a breakdown below that level, especially if followed by a breach of the November lows at 6,522, would raise more serious questions about the staying power of this bull market.”

WTI crude remains more than 48% higher this month, and the S&P 500 sits about 5% off its all-time high. Deutsche Bank’s Jim Reid noted Friday marks the 15th trading day of the conflict — “That is on average when we bottom out in U.S. equities after a geopolitical shock.”

Other Notable Developments

• Super Micro Computer (SMCI): Shares tumbled 12% after hours following chip-smuggling charges against the company’s co-founder, an employee, and a contractor for allegedly smuggling billions of dollars’ worth of Nvidia chips to China.
• FedEx (FDX): Shares rose 8% on a strong earnings beat — $5.25 EPS vs. $4.09 estimated, on revenue of $24B vs. $23.43B expected. The company also raised fiscal 2026 revenue guidance.
• Fed rate outlook: The Federal Reserve kept interest rates unchanged this week. Chair Powell cautioned the economic outlook remains uncertain amid the ongoing conflict.
• NATO tensions: European allies remain firm in refusing military participation. German Chancellor Friedrich Merz stated: “We have declared that as long as the war continues, we will not participate.” German Defense Minister Boris Pistorius said: “This is not our war, we have not started it.”

Outlook

The coming week will be pivotal for Asian markets. Key factors to watch include:

• Japan’s market reopening on Monday — the Nikkei faces potential catch-up selling after the Pearl Harbor controversy and continued geopolitical uncertainty during Friday’s holiday closure
• Strait of Hormuz developments — Wells Fargo’s Scott Wren believes the strait opens “in a matter of weeks not months,” which could mark a turning point for oil prices and risk sentiment
• Oil price trajectory — Saudi Arabia’s warning of possible $180/barrel oil if supply disruptions persist poses the worst-case scenario for global growth
• Stagflation vs. resilience debate — Goldman Sachs suggests gold remains a strong stagflation hedge, while Yardeni Research and the Fed argue that sustained stagflation remains unlikely

As the conflict enters its third week, the market’s ability to hold current levels will depend heavily on whether diplomatic efforts to reopen the Strait of Hormuz gain traction — and whether the tit-for-tat strikes on Middle Eastern energy infrastructure come to a halt.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. All data sourced from CNBC and publicly available reports as of March 20, 2026. Market data may be delayed. Images are used under fair use for news commentary purposes with full attribution to original sources.