The Nikkei Stock Average fell sharply following President Trump's speech. Okazaki Kohei (岡崎康平) of Nomura Securities examined the issues surrounding the speech's assertion of the legitimacy of the situation involving Iran and uncertainty over oil supplies, which heightened anxiety in Japanese markets and could spill over into fiscal and interest-rate risks.
Following President Trump's speech on 2 April, the Nikkei Stock Average turned lower in the Japanese market, at one point falling more than ¥1,400 after the speech. The speech itself asserted the legitimacy of the attack on Iran and emphasized eliminating threats within the United States.
Some market participants had expected an announcement on ceasefire arrangements, but no progress was seen toward a ceasefire agreement, heightening uncertainty surrounding Iran. Iran's Foreign Ministry said that it was not engaged in direct negotiations with the United States, making the activities of neighboring countries acting as intermediaries a key focus.
Optimism faded, and share-price movements became more active, particularly among energy-related stocks. With market participants watching oil price trends and election developments in Israel and the United States, the escalating tensions in the Middle East are expected to influence the market's direction over the longer term.
The situation is also expected to spill over into Japan's fiscal and interest-rate risks. It was suggested that budget planning and strategic documents could be reviewed based on the risk of disruptions to oil supplies and accelerating inflation. The view was also expressed that the risk of rising long-term interest rates would come into focus in the bond market.