Asia in Flames: Japanese and Korean Stock Markets Plunge up to 6%
Asian-Pacific markets suffered sharp declines today, Monday (23/3/2026), with major indices in Japan and South Korea dropping more than 5% as investors shunned risky assets amid escalating conflict in the Middle East, now in its fourth week.
US President Donald Trump stated on Saturday that he would “destroy” Iran’s power plants if Tehran fails to fully reopen the Strait of Hormuz—a vital route for global energy flows—within 48 hours.
Iran retaliated, threatening to target energy infrastructure and desalination facilities in the Gulf if the US carries out its ultimatum.
Iranian Parliament Speaker Mohammad Bagher Ghalibaf said on Saturday that any attack on the country’s power plants would be “immediately” met with counterstrikes against energy and oil infrastructure across the region.
“Critical infrastructure, energy and oil infrastructure across the region will be considered legitimate targets and will be permanently destroyed, and oil prices will rise for a long time,” Ghalibaf said on X, quoted by CNBC International on Monday (23/3/2026).
On Sunday, Ghalibaf expanded the threats to US government bondholders, warning that financial entities buying American government bonds and “financing the US military budget” would be considered legitimate targets, along with military bases.
Crude oil prices were largely stable in early Monday trading. Brent crude fell 0.25% to US$111.97 per barrel this morning. US West Texas Intermediate crude dropped 0.6% to US$97.64 per barrel.
The spread between Brent and WTI exceeded US$14 per barrel, the sharpest price difference between the US and international crude benchmarks in several years.
This widening gap may indicate the “peak intensity of this oil crisis,” Chris Verrone, head of market strategy at Strategas Research, told CNBC’s “Squawk Box Asia” on Monday (23/3/2026).
The high Brent crude prices are likely to lead traders to price in a longer conflict, he added.
Japan’s Nikkei 225 index fell nearly 5%, extending losses from the previous session, while the broader Topix index dropped 4.4%. South Korea’s benchmark Kospi stock index plunged more than 6%, and the small-cap Kosdaq index fell nearly 5%. Korean trading was briefly suspended after the Kospi 200 futures index dropped more than 5%.
Australia’s S&P/ASX 200 index fell 2.4%. Hong Kong’s Hang Seng Index and mainland China’s CSI 300 fell nearly 2% at the open. Overnight in the US, stock futures were little changed. The Dow Jones Industrial Average futures were flat, the S&P 500 futures down 0.1%, and Nasdaq Composite futures down 0.2%.