investingLive Asia-Pacific market news: Trump vows sweeping new Iran sanctions NewsEamonn Sheridan20/08/2026 | 03:29 GMTTagsSession wrapWrap AsiaAdd as a preferredsource on GoogleMarket moving news for Asian trading on Thursday, August 20, 2026 Asian equities rallied and gold surged after the US Treasury's bond buyback shock hit yields and the dollar. Trump unveiled sweeping new economic measures against Iran as Axios revealed a covert US-run Hormuz oil corridor, while a vessel fire near the strait remains unconfirmed.SK Hynix swap costs, which spiked to 1000bp in June, now said to halveRun on banks feared as concern rises over government seizing deposits to fund warAustralia's jobless rate climbs to a near four year high in JulyPBOC sets USD/ CNY mid-point today at 6.
7808 (vs. estimate at 6.7196)Australian July 2026 jobs report: Unemployment rate 4.
5% (expected 4.4%, prior 4.4%)China's 5 year and 1 year Loan Prime Rate (LPR) remain at 3.
5% and 3% respectivelyGold's oversized reaction to Treasury buyback reflects debasement tradeAI boom powers Japan's exports as semiconductor shipments surge 49%Japan July 2026 exports and imports both higher than expectedUBS stays constructive on equities as VIX hits 2026 low despite risksTrump vows crushing new economic operation against Iran, warns alliesBessent's panic move risks reigniting rate hike bets, hands Fed hawks new ammunitionFed independence in focus as senators question Warsh's calendar gapsA radical Bessent, panicking with big Treasury bond buyback move, craters the dollarDeutsche Bank sees 4 reasons Treasury buyback move is dollar negative (ps. Fed hike too?)ICYMI - HUGE news: US Treasury's giant bond buyback boost sinks dollar, lifts stocksICYMI: US runs stealth Hormuz oil corridor, moving 10 million barrels a day: AxiosAustralia jobs preview: Divergence on whether June's hiring surge holdsinvestingLive Americas FX news wrap: Surprise US Treasury announcement sends dollar lower, gold higherSummary:Axios reports the US military has quietly run a shipping corridor through Hormuz's southern channel for several weeks, moving close to 10 million barrels of oil a day, about half pre-war volumePresident Trump announced what he called the most crushing economic operation ever taken against any country, targeting Iran and threatening penalties on any nation helping it evade sanctionsUnconfirmed reports describe a vessel on fire in the Strait of Hormuz, understood to be on the Iran crossing rather than the Oman route; oil has traded steadily near recent highsThe US Treasury's move to double long-dated bond buybacks eased a bond market selloff, sending the dollar lower and gold sharply higher, as US national debt passed 40 trillion dollarsAsian equities rallied broadly, led by a Kospi surge that triggered a trading halt, alongside gains in the Nikkei, Topix and Chinese mainland indicesThe People's Bank of China held loan prime rates steady for a fifteenth straight month and set a notably weaker yuan reference rate after the currency hit a three-year highJapan's July exports grew at their fastest pace since October 2022 on AI-driven semiconductor equipment demand, though a trade deficit is expected to persist while Hormuz-related energy costs stay elevatedAustralian employment unexpectedly fell in July and the jobless rate hit its highest level since late 2021, easing pressure on the Reserve Bank of Australia for a near-term hikeMarkets moved through a heavy news cycle overnight, with a surprise US Treasury intervention driving much of the price action even as tensions around Iran and the Strait of Hormuz continued to build.
Axios reported that the US military has quietly operated a shipping corridor through Hormuz's southern channel, off the coast of Oman, for several weeks, citing US officials. Between 15 and 20 tankers transit the strait nightly, with daily exports now close to 10 million barrels, roughly half pre-war volume, and some nights seeing as much as 15 to 20 million barrels move out of the Gulf. The operation includes escorting loaded outbound tankers and guiding empty vessels into the Gulf to collect oil before departing.
Separately, President Trump announced what he described as sweeping new economic warfare against Iran, framing it as the most crushing economic operation ever taken against any country and warning that any nation helping Tehran evade sanctions would face severe financial penalties. Trump said the move followed Iran's failure to take the opportunity to reach a deal with the US.Unconfirmed reports also emerged of a vessel on fire in the Strait of Hormuz.
It remains unclear who struck the vessel or what type of attack was involved, and the incident does not appear to be linked to the Oman route used by the US-run corridor, but rather the Iran crossing. Oil prices traded steadily near recent highs despite the report. Gold, too, traded near its highs.
The dominant market driver into the Asian session, however, was the US Treasury's announcement that it would more than double its long-dated bond buybacks, a move that eased a selloff which had pushed 30-year yields to their highest level since 2007. The dollar fell sharply during US trading hours on the news, while gold jumped higher. The intervention came against the backdrop of US national debt rising above 40 trillion dollars, though the dollar's overall ranges in Asian trade remained relatively narrow.
Asian equities rallied broadly in response. Japan's Nikkei 225 opened 461 points higher, up 0.7%, and extended gains to around 1% by the midday break, while the broader Topix rose 0.
9%. South Korea's Kospi opened 3% higher and extended its advance to around 5.5%, triggering the exchange's sidecar trading halt mechanism after the surge.
In mainland China, the Shanghai Composite rose 0.33% at the opening, the Shenzhen Component gained 1.03% and the ChiNext Index climbed 1.
27%,.The People's Bank of China left its benchmark lending rates unchanged for a fifteenth consecutive month, holding the one-year loan prime rate at 3.00% and the five-year rate at 3.
50%, in line with market expectations. Analysts said the steady rates suggest policymakers may lean more on accelerated fiscal measures than fresh monetary easing to support growth, with banks already contending with near-record-low profit margins. Separately, China's central bank set its daily yuan reference rate 612 pips weaker than market estimates, the largest weak-side deviation since February 27, signalling a desire to slow the currency's gains after the yuan climbed to its strongest level against the dollar in more than three years.
On data, Japan's exports rose 23.2% year on year in July, beating forecasts of 19.9% and marking a fifth consecutive month of accelerating growth, the fastest pace since October 2022, driven by a 49.
1% jump in semiconductor equipment shipments tied to AI demand. Imports climbed 27.8%, also topping estimates and reaching their highest level since November 2022.
Japan posted a trade deficit of 634.5 billion yen for the month, and the deficit is expected to persist in the near term as elevated energy costs continue to weigh on import values until shipping through the Strait of Hormuz normalises, even as AI-driven export strength continues.In Australia, employment unexpectedly fell in July and the unemployment rate rose to its highest level since late 2021, adding to signs of a cooling labour market.
The data sent the Australian dollar only modestly lower. Markets are pricing in little chance of a Reserve Bank of Australia rate hike next month, though a move by year end remains regarded as close to even odds, with much depending on upcoming inflation data.ADVERTISEMENT - CONTINUE READING BELOWMust ReadWhat is tradeCompass at investingLive.
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