Japan's Nikkei 225 Set to Open Lower Amid Geopolitical Tensions and Rising Oil Prices

Japanese markets are set to open lower on Monday as investors react to heightened geopolitical tensions between the U.S. and Iran, which have driven oil prices upward. The Nikkei 225 is expected to open with a decline, with futures pointing to a potential drop from its previous close of 53,123.49. Most Asian markets remain closed for holidays, limiting broader regional market activity. President Donald Trump issued a series of threats over the weekend, warning that the U.S. would target Iran's civilian infrastructure if the country fails to fully reopen the Strait of Hormuz by Tuesday. The Strait, a critical global energy chokepoint, handles approximately one-fifth of the world's oil and gas supplies. Trump's rhetoric, which included a vow to bring 'Hell' to Iran following the rescue of an American airman shot down in the country, has intensified fears of further escalation. The White House confirmed that Tuesday is the new deadline for a potential agreement with Iran. Meanwhile, oil prices climbed, with U.S. West Texas Intermediate for May rising 2.57% to $114.11 per barrel, and Brent crude gaining 2.62% to $111.65 per barrel. In response to the ongoing conflict, eight OPEC members and allies increased their production quotas by 206,000 barrels per day for May, though the move is seen as largely symbolic due to production constraints caused by the war. U.S. stock futures also fell overnight, with the Dow Jones Industrial Average futures shedding 0.5%, while S&P 500 and Nasdaq-100 futures declined 0.6% and 0.7%, respectively. The Nikkei 225's Chicago contract stood at 53,065 as of the latest data, signaling a potential opening lower than its previous close.