The global financial landscape shifted dramatically on April 7, 2026, when the US and Iran announced a two-week provisional ceasefire to their weekslong conflict. Global markets rallied on a potential reopening of the Strait of Hormuz and resumption of oil and gas flows.
Japan and Korea, two Asian industrial powerhouses highly reliant on Middle East resource imports, saw their respective stock markets jump by 5% and 8%, respectively, in the aftermath of the ceasefire announcement.
The prospect of a lasting agreement between the US and Iran has made Japanese and South Korean ETFs particularly appealing as mid-long-term recovery plays. The two countries had seen their stock markets rally in the months and years leading up to the conflict.
We take a deeper look below at the factors shaping this trend.
How the US-Iran Ceasefire Impacts Global Energy
The recent rally in Asian markets has been primarily driven by the potential reopening of energy shipping routes in the Gulf.
Following the U.S.-Iran ceasefire announcement, both South Korea and Japan ETFs saw significant gains. The iShares MSCI South Korea ETF (EWY) experienced a substantial rally during midday trading, climbing more than ~8% in the 24 hours between its closing price of $127.19 on April 7 and $140.07 on April 8. Similarly, the iShares MSCI Japan ETF (EWJ) rose by over ~5% within the same period, moving from an approximate closing price of $85.51 on April 7 to around $89.41 on April 8.
Research shows that Asian buyers account for three-quarters of oil imports that pass through the Strait of Hormuz.
(Statista; Quarter of Maritime Oil Trade Flows Through Strait of Hormuz)
Before April 8, the oil prices had surged toward $120 per barrel, pressuring nations with limited natural resources that rely on imported energy sectors. Once the ceasefire was announced, US Brent crude plummeted by nearly 16%.
(IRU; War in Iran: fuel prices remain high and volatile)
This sudden drop in input costs will be a relief for the manufacturing-heavy economies of East Asia, which rely heavily on imported oil.
Why Japan ETFs are Surging on Peace News
Japan was the first market to react to the news because it sources ~93% of its oil from the Persian Gulf region. Following the announcement, the Nikkei 225 gained 5%, mirroring a massive sigh of relief from automotive manufacturers to electronics companies.
Still, there is no clear sign on whether a lasting peace agreement will happen, and traders are waiting to see whether or not shipping through the Strait of Hormuz will normalize as promised.
For retail investors looking for broad, medium-term recovery exposure, the iShares MSCI Japan ETF (EWJ) is an option. This ETF tracks the MSCI Japan Index, holding approximately 180 Japanese large- and mid-cap equities, and covers about 85% of Japan’s investable stock market. It allows traders to capitalize on market opportunities without selecting individual stocks. The fund’s industry allocation is heavily weighted towards industrials, which make up around 26% of the ETF, with key holdings including Toyota, Hitachi, and Fanuc.
Because the Japanese Yen often fluctuates wildly during times of geopolitical crisis, many traders look for platforms that offer high liquidity and low slippage to execute their trades. Staying updated on these trends is essential; you can trade EWJ-PERP with up to 50x leverage with 24/7 trading and unified margin on BTSE.
(BlackRock; iShares MSCI Japan ETF)
South Korea ETFs and the Tech Sector Recovery
South Korea’s KOSPI market also recovered in the wake of the ceasefire announcement, surging by almost 8%.
Manufacturing powerhouses like Samsung and SK Hynix are heavily reliant on oil and gas imports transported through the Strait of Hormuz, and their stocks previously plummeted over the last month.
(BlackRock; iShares MSCI South Korea ETF)
Now that a recovery is imminent, the iShares MSCI South Korea ETF (EWY) could be a strong play. The ETF provides direct access to tech leaders and tends to rebound faster than peers because of its high beta to global trade and tech‑cycle optimism, considering South Korea’s status as an emerging market.
This makes it a high-reward play for retail investors who believe that the current two-week truce could eventually be extended into a more permanent arrangement. Trade EWY-PERP with 50x leverage on BTSE to position for a lasting recovery.
Understanding the Risks of a Temporary Truce
The current ceasefire is provisional and set for a 14-day window. Initial market reactions have been overwhelmingly positive. However, a “bet” on a lasting recovery depends on whether or not pending negotiations can produce a lasting framework.
In other words, the recent gains made by the abovementioned Japan and Korea ETFs could quickly evaporate if talks break down and hostilities resume.
Because these markets are sensitive to sudden headlines, these ETFs could very well open at much lower prices than they closed the day before. Staying informed through real-time updates, such as BTSE’s Market Insights, can help you stay ahead of these sudden shifts.
The Long-Term Outlook for East Asian Markets
If the provisional ceasefire leads to a lasting regional settlement, Japan and South Korea could resume their multi-year trend of outperformance, given how much their markets had rallied in the year leading up to the US-Iran conflict.
This shift would likely draw in more foreign investment, especially given the capital flowing into memory chips and advanced manufacturing industries as a way to diversify against China.
Now, you can trade Japan and South Korea ETFs perps on BTSE with up to 50x leverage to position yourself for this long-term trend.
