Asian equities surge to fresh highs as peace hopes dent dollar and oil
Asian equity markets climbed to new peaks on Thursday, buoyed by growing expectations of a peace settlement in the Middle East. The Nikkei emerged from a long holiday to break the 62,000 barrier, while South Korean and Taiwan indexes also posted record highs, propelled by a strong AI‑driven rally and solid earnings. MSCI's broadest Asia‑Pacific index outside Japan rose 1%, reaching another all‑time high and up 7% for the week so far.
Kyle Rodda, senior analyst at Capital.com, said the upside was justified by the prospect of a breakthrough deal, but warned that markets could reverse quickly if negotiations stall. Iran announced it was reviewing a peace proposal that could formally end the war, yet it left open the U.S. demands on halting its nuclear program and reopening the Strait of Hormuz, a chokepoint whose closure had previously driven oil prices higher.
Oil prices slipped nearly 8% after the potential deal was reported, with Brent crude trading around $102.11 a barrel in early Asian trading. Despite the drop, oil remains about 40% above levels at the conflict’s start, and 10‑year Treasury yields are roughly 40 basis points higher, highlighting inflationary pressures. OCBC analysts noted that even if the strait reopens soon, oil is likely to stay elevated due to damaged infrastructure and precautionary stockpiling.
In currency markets, the euro held its overnight gain of about 0.5% at $1.1747, while sterling rose 0.4% to $1.3591. The dollar index slipped to 98.032. The yen stayed in focus after a sudden jump to a 10‑week high of 155 per dollar, later settling at 156.29, prompting speculation about possible intervention by Tokyo. OCBC analysts argued that intervention alone may not reverse the trend without broader policy support, maintaining a year‑end target of 155.
Global markets have been buoyed by a fragile ceasefire and the chance of a deal, fostering a risk‑on rally since April, reinforced by strong tech earnings. US indices S&P 500 and Nasdaq closed at record highs, with S&P 500 companies on track for their strongest profit growth in over four years. Investors await Friday's non‑farm payrolls report, with expectations of 62,000 new jobs in April after a 178,000 increase in March.
