‘Cautious optimism’ in Asia after US, Iran agree to ceasefire, reopen Hormuz

President Donald Trump’s announcement of a two-week ceasefire between the US and Iran that will see Tehran temporarily reopen the vital Strait of Hormuz brought welcome relief to Asian markets on Wednesday.With Trump’s deadline approaching for the Islamic Republic to reopen the waterway or face obliteration, he announced a halt to attacks for two weeks and said he had received a “workable” 10-point proposal.Iran later said it had agreed to safe passage in the strait, through which a fifth of global oil and gas passes.The euphoria sent Asian equities rocketing on hopes the crisis that has shocked the global economy for more than a month will come to an end. Seoul and Tokyo soared more than 5 per cent, Taipei added nearly 4 per cent, Sydney and Hong Kong more than 2 per cent. Shanghai, Singapore and Wellington were also sharply higher.“Yet the mood remains one of cautious optimism rather than outright celebration. The ceasefire is only two weeks long, and markets will be watching closely to see whether shipping through the Strait of Hormuz normalises as promised and whether the fragile truce can pave the way for a more durable peace agreement,” Tim Waterer, chief market analyst at KCM Trade, said.US President Donald Trump is seen on a screen as traders work at the foreign exchange dealing room of the Hana Bank headquarters in Seoul on Wednesday. Photo: APTrump had threatened on Tuesday that if the strait was not reopened, “a whole civilisation will die tonight, never to be brought back again”. That came after he vowed to bomb bridges, power plants and other civilian infrastructure in Iran.