Asia Soars, US-Iran Deal Optimism Boosts Risk Appetite!
Japanese stocks rose sharply upon returning to trading after a holiday, as optimism grew that the US and Iran were moving closer to a deal to end the conflict that had shaken markets and weighed on the economic outlook.
The Nikkei 225 index rose 3.4%, while Australian and South Korean stocks also advanced. Regionally, the MSCI Asia Pacific added 0.6%, extending the rally in Asian stocks, fueled by global risk-on sentiment after the S&P 500 and Nasdaq 100 closed at record highs on Wednesday.
The improvement in sentiment came primarily from energy prices. Brent plunged nearly 8% on Wednesday to just above US$101/barrel, fueling a rally in US and global bonds. Oil prices did open higher on Thursday, but the sharp decline in the previous session was enough to ease inflation concerns and lower expectations of a Fed rate hike, which in turn supported equities.
In the foreign exchange market, attention was focused on the yen, which held steady at around 156.35 per US dollar on Thursday morning, after strengthening in the previous session amid speculation of government intervention. In the US session, the dollar fell back to pre-war levels, while gold surged, reflecting portfolio repositioning amid changing risk perceptions.
From a geopolitical perspective, Washington reportedly presented a brief memorandum paving the way for a gradual easing of the blockade and reopening of access to the Strait of Hormuz, although a final agreement is still pending and Iran's response is still awaited. Trump also stated that the war has a "very good chance of ending," with China also pushing for the reopening of Hormuz. Some market participants believe that as long as the de-escalation path remains in place, risk appetite is likely to be maintained.
Investors' focus next shifts to US data and monetary policy signals ahead of Friday's payrolls release. Recent data showed US companies increased hiring in April by the most in more than a year, while Fed officials emphasized the uncertainty surrounding the economy and the persistence of inflation risks. In global equities, optimism was also boosted by the AI and corporate narratives, although sector reactions remained mixed. On Thursday morning, the Topix rose 2.1%, the S&P/ASX 200 rose 1%, Hang Seng futures rose 1.1%, and Euro Stoxx 50 futures gained 3%. (asd)
Source: Newsmaker.id
