Asia Intelligence Brief — Monday, May 25, 2026
Executive Summary
Asia intelligence brief covers the Quad foreign ministers' Delhi meeting, Japan's Nikkei record, Taiwan's all-time high, China's rally, India's rupee, oil's drop.
India prepares to host the Quad foreign ministers in New Delhi on Tuesday, with the Hormuz crisis and a contested Indo-Pacific topping the agenda. Japan’s Nikkei hit an intraday record as a sharp oil drop relieved the energy importer. Taiwan’s Taiex touched an all-time high on the chip rally, and China’s CSI 300 jumped. India’s central bank flagged the rupee as undervalued after a 6% slide. Today’s Asia intelligence brief, with Hong Kong, Seoul, and US markets shut for holidays, tracks six decisions converging on the Monday tape.
01 · India — Jaishankar to Host Quad Foreign Ministers Amid Hormuz Crisis
India will host the Quad foreign ministers’ meeting in New Delhi on Tuesday, chaired by External Affairs Minister S. Jaishankar and attended by US Secretary of State Marco Rubio, Australia’s Penny Wong, and Japan’s Toshimitsu Motegi.
It is the first such gathering in India since 2023 and the first since the July 2025 Washington meeting, coming days after President Trump’s Beijing summit with Xi Jinping.
The closure of the Strait of Hormuz and the West Asia conflict’s potential global impact sit high on the agenda alongside a free and open Indo-Pacific, though analysts note the grouping is shifting toward economics — critical minerals, supply-chain resilience, and emerging technology — with China the unstated focus. Rubio arrived in New Delhi for separate bilateral talks ahead of the meeting.
The session is widely read as a signal that US engagement with Beijing does not diminish Washington’s Indo-Pacific commitment, even as doubts over the Quad’s momentum have grown with no leaders’ summit since 2024.
02 · Japan — Nikkei Hits Intraday Record as Oil Drop Relieves Energy Importer
Japan’s Nikkei 225 ended Monday 2.87% higher at 65,158.19 after hitting an intraday record, as a sharp drop in oil prices relieved the resource-importing economy. West Texas Intermediate fell 4.71% to $92.06 a barrel and Brent dropped 4.42% to $98.96 in early Asia trade, easing the imported-inflation pressure that has shadowed the Iran-war period.
The rally extends the recovery that has carried the Nikkei to successive records, underpinned by the semiconductor-export strength and the AI-capex cycle. The move comes ahead of a US presidential state visit next week, where Prime Minister Sanae Takaichi will host talks expected to cover security and her “POWERR Asia” energy-resilience initiative for Southeast Asian petroleum-storage cooperation.
The oil relief against the export-led recovery anchors the Japanese growth story, even as the 10-year JGB yield stays elevated.
03 · Taiwan — Taiex Touches All-Time High on Chip Rally
Taiwan’s Taiex ended Monday 3.26% higher at 43,644.40 after hitting an all-time intraday high, led by the semiconductor complex that anchors the island’s export economy. The rally tracks the global chip strength and the AI-demand cycle that has lifted the technology supply chain across the region.
The record lands against the backdrop of the pending US $14bn arms package and the post-Beijing-summit recalibration of cross-Strait tensions, with the chip sector’s strategic weight central to both Taiwan’s economy and the US-China contest. The semiconductor-led gains reinforce Taiwan’s position at the heart of the AI-hardware supply chain, even as the security premium tied to the arms decision remains a structural overhang.
The TSMC-anchored complex is the key swing factor for the index.
04 · China — CSI 300 Jumps as Oil Drop Eases Import-Cost Pressure
Mainland China’s CSI 300 rose 1.58% to 4,921.6 Monday, lifted by the sharp drop in oil prices that eases the import-cost pressure on the world’s largest crude importer. The move extends the stabilisation since the May 14 Trump-Xi Beijing summit, which steadied the trade relationship between the world’s two largest economies.
The rally lands against the PBOC’s accommodative stance, with loan prime rates held at record lows, as Beijing balances the energy-shock backdrop against soft domestic demand. The oil relief is particularly material for China, the world’s largest crude importer, and the lower energy bill supports the growth-stabilisation effort.
The China-demand cycle, against the trade-truce durability and the property-sector overhang, frames the near-term trajectory.
05 · India — RBI Flags Rupee as Undervalued After 6% Slide
India’s central bank governor Sanjay Malhotra said the rupee currently appears undervalued following a sharp depreciation of around 6% since the West Asia war erupted on February 28, even as the GIFT Nifty signalled a gap-up open on US-Iran-deal hopes. The currency’s slide reflects the imported-inflation pressure from the energy shock and the climb in domestic bond yields.
The assessment lands as oil-marketing companies raised petrol and diesel prices by ₹2.61-2.71 a litre, with Delhi petrol rising to ₹102.12, underscoring the pass-through of the energy shock to consumers amid a brutal heatwave nearing 49°C. The RBI weighs its policy path against the inflation surge and the rupee’s level.
Among corporate signals, Adani-affiliated shares had risen after the US dropped fraud charges against the founder. The crude-and-currency channel remains the key macro driver.
06 · Markets — Asia Rallies on Oil Crash and US-Iran Deal Hopes
Asia-Pacific markets rallied broadly Monday May 25 as a sharp drop in oil prices and renewed hopes for a US-Iran deal lifted sentiment, with Hong Kong, South Korea, and US markets closed for holidays. The Nikkei rose 2.87% to an intraday record, Taiwan’s Taiex hit an all-time high up 3.26%, China’s CSI 300 gained 1.58%, and India’s Nifty 50 added 1.09%.
The oil crash was the dominant driver — WTI down 4.71% to $92.06, Brent off 4.42% to $98.96 — as traders bet on a negotiated end to the Iran conflict, relieving the energy-import premium that has weighed on the region since late February. The risk-on tone, against thin holiday liquidity, reflected the broad relief for energy-importing Asia.
With the Quad meeting on Tuesday, the Iran-negotiation trajectory and the energy-price path remain the key near-term swing factors.
The Read
Six decisions converge on the Monday tape. India prepares to host the Quad foreign ministers as the Hormuz crisis tops the agenda.
Japan’s Nikkei hits an intraday record as the oil drop relieves the energy importer. Taiwan’s Taiex touches an all-time high on the chip rally.
China’s CSI 300 jumps as cheaper oil eases import costs. India’s RBI flags the rupee as undervalued after a 6% slide.
Asia rallies broadly on the oil crash and US-Iran-deal hopes, with key markets shut for holidays.
What to Watch
- Tue · May 26 · Quad foreign ministers’ meeting, New Delhi
- Next week · US presidential state visit to Japan
- Ongoing · US-Iran negotiation and oil-price path
- Late May · Trump decision on $14bn Taiwan arms
- Jun 16-17 · FOMC June — Warsh era opens
- Jun 17-18 · BoJ Monetary Policy Meeting
Coverage Tease
Today’s Dossier opens with the Editor’s Leader on the Quad’s economic pivot as the week’s defining axis. The Deep Dive maps three scenarios for the Quad-and-Indo-Pacific trajectory through Q3. The Country Risk Dashboard recalibrates ten Asian economies. Trade and Positioning anchors eight active calls. Power Players names five principals.
FAQ
Why does the Quad meeting matter now?
The New Delhi gathering — the first in India since 2023, days after Trump’s Beijing summit — signals that US engagement with China does not diminish the Indo-Pacific commitment, with the agenda shifting toward critical minerals, supply chains, and technology amid the Hormuz crisis. For LATAM allocators, the Quad’s economic pivot reinforces the critical-minerals and supply-chain-resilience theme relevant to Latin American mining and reshoring positioning through Q3.
What drove the Asian rally?
A sharp oil crash — WTI down 4.71% to $92.06, Brent off 4.42% — on US-Iran-deal hopes lifted energy-importing Asia, sending the Nikkei to an intraday record and Taiwan’s Taiex to an all-time high. For LATAM allocators, the oil relief and the AI-chip strength support the technology-supply-chain and energy-importer-equity read across Brazilian and Mexican exposure.
How significant is the rupee’s slide?
The RBI’s flag of the rupee as undervalued after a 6% depreciation since the war began reflects the imported-inflation pressure, with petrol and diesel prices raised ₹2.61-2.71 a litre. For LATAM allocators, India’s energy-importer currency dynamic parallels the broader EM crude-sensitivity theme relevant to EM-FX and rate positioning.
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