Japan, South Korea Stocks Open Sharply Lower; Kospi Slumps 6% Triggering Circuit Breaker; Gold Drops 3% Intraday

TradingKey - Japanese and South Korean stocks opened lower on Monday, March 23. As of 9:00 (GMT+8), the Nikkei 225 had fallen more than 4%, losing the 51,000 mark, while South Korea's Kospi index saw its decline briefly widen to 6%, dropping below 5,500. After KOSPI 200 futures fell 5%, the Korea Exchange triggered a circuit breaker for the KOSPI index, halting program trading for five minutes. The won fell to its lowest against the U.S. dollar since March 2009.

Gold prices fell 3% intraday, dropping below the $4,400 level to reach a low of $4,329.81.

Analysts believe that the broad decline in U.S. stock indices last Friday and the lack of substantial de-escalation in the U.S.-Iran conflict over the weekend weighed on Japanese and South Korean markets. Donald Trump even issued a 48-hour ultimatum demanding the full reopening of the Strait of Hormuz, threatening to destroy Iranian power facilities otherwise.

Regarding gold, the U.S.-Iran conflict has driven up oil prices, fueling inflation expectations and making it more difficult for the Federal Reserve to cut interest rates, which is bearish for the metal. Additionally, the U.S. Dollar Index strengthened significantly, briefly breaking above 100, as safe-haven capital prioritized more liquid assets like the dollar and U.S. Treasuries, further weighing on gold.