US-Iran Peace Agreement Sparks Surge in NY Stock Market and Opening of Strait of Hormuz
Today's briefing covers the historic news of the peace agreement between the US and Iran, Japan's interest rate hike, and major changes in domestic politics and the real estate market.
The United States and Iran have agreed to end their tense relationship by signing a Memorandum of Understanding (MOU) to end the war. Following this news, the three major indices of the New York stock market closed sharply higher as risk appetite revived. US President Donald Trump announced that the Strait of Hormuz will be fully opened without tolls starting this Friday. The Strait of Hormuz is a key corridor for global crude oil transportation. International oil prices plummeted following the agreement, while gold prices continued their upward trend for the second day. However, it is reported that the MOU does not include the easing of economic sanctions against Iran.
The Bank of Japan (BOJ) raised its benchmark interest rate by 0.25 percentage points, from 0.75% to 1%. This is the highest interest rate level in 31 years. The BOJ strengthened its tightening stance by implementing another hike just six months after raising rates in December of last year.
In domestic politics, controversy surrounding President Lee Jae-myung's remarks is spreading. When President Lee raised the issue of the ruling party's responsibility regarding the June 3 local elections via video conference during his European tour, the People Power Party reacted strongly, calling it unfair "interference in party affairs." In the course of the controversy, past rulings related to former President Park Geun-hye are being mentioned, and the repercussions are growing.
The ultra-expensive housing market in Seoul has reportedly shrunk. This year, a total of 1,487 apartments were traded for more than 3 billion won in Seoul, a decrease of about 35% compared to the same period last year. This is interpreted as a result of a significant decrease in investment demand as the government's regulations on multi-homeowners and loan restrictions continue.
Other news includes KAIST researchers developing a micro-waterway technology that can reduce the cooling power of AI data centers to one-tenth, and Lotte Group Chairman Shin Dong-bin receiving hands-on training for Artificial Intelligence Transformation (AX). More details can be found in the news section of the app.