Asian stock markets were a mixed bag on Wednesday, with Hong Kong's Hang Seng Index falling over 1% as geopolitical unease deepened around the Israel-Iran conflict and possible U.S. military involvement. In contrast, Japan's Nikkei 225 climbed to a four-month high, supported by a softer yen and strong local equity momentum.

Key Market Highlights

Hong Kong Leads Losses

• Hang Seng Index: -1.1%
  Geopolitical risk surged after reports that former U.S. President Donald Trump convened top officials to discuss military options on Iran, demanding an “unconditional surrender.” This escalated concerns over broader Middle East stability and triggered risk-off sentiment across Asian markets.

Mainland China Falls Further

• Shanghai Composite: -0.5%

• CSI 300 Index: -0.4%
  Ongoing trade friction with the U.S. and regional war fears added to China's market weakness.

India, Singapore, and Indonesia Stay Flat

• Nifty 50 Futures: Unchanged

• Straits Times Index (Singapore): -0.5%

• Jakarta Composite Index: -0.1%

Japan Outperforms Despite Export Slump

• Nikkei 225: +0.7%

• TOPIX Index: +0.5%
  Japanese exporters were lifted by a weaker yen, offsetting the impact of new U.S. tariffs. However, data showed exports fell 1.7% YoY in May, with U.S.-bound exports down 11.1%—the first decline in eight months, highlighting vulnerability to trade policy shifts.

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With traders awaiting the Federal Reserve's interest rate decision later today, volatility may increase across Asian and emerging markets. While no rate change is expected, updated economic projections and Powell's tone could guide investor positioning in the near term.