Oil-themed funds opened lower: Global Oil & Gas Energy LOF fell more than 3%; Harvest Crude Oil LOF dropped over 2%; E Fund Crude Oil LOF, China Southern Crude Oil LOF and Petroleum Fund LOF each fell more than 1%.

Allianz chief adviser Mohamed El-Erian said Japan's finance minister Katayama identified as a priority encouraging households and pensions, including the Government Pension Investment Fund (GPIF), to raise allocations to Japanese financial assets. Katayama's comments pushed the 10-year JGB yield down about 9bps and the yen up roughly 0.5% in Tokyo trade. If this marks a reorientation of Japan's large portfolio—still a significant uncertainty—the immediate market question is which overseas holdings would be pared first.

Abas Aslani, senior researcher at the Tehran-based Middle East Strategic Studies Center, says Iran is seeking to repair ties with Gulf neighbors despite launching a series of attacks on their territory. He says Tehran is pursuing diplomatic, negotiated channels and has sought to limit the scope and scale of responses to US actions; Western misreading of Iranian flexibility as weakness could be interpreted as a red carpet for further attacks. Aslani adds Iranian officials have held consultations with regional counterparts to mend relations, a process Israel and the United States oppose as they seek to sow division between Iran and its neighbors.