Asia-Pacific markets were mixed on Wednesday, with Japanese and South Korean benchmarks extending record highs as investors balanced optimism over corporate earnings against ongoing geopolitical uncertainty surrounding Iran and fragile ceasefire negotiations.
The region reacted to recent United States military activity in Iran, with Pentagon-confirmed “self-defence” strikes carried out in southern Iran early Tuesday.
The strikes targeted missile launch sites and vessels allegedly attempting to deploy mines, even as Washington maintained it was operating under a ceasefire framework.
By 11:25 am AEST (1:25 am GMT), Australia’s S&P/ASX 200 was down 0.2%, while Japan’s Nikkei 225 rose 1.6% and South Korea’s KOSPI surged 4.2%, with both Japanese and Korean benchmarks extending record highs.
In South Korea, business sentiment improved for a third consecutive month, reaching a 3½-year high in May, supported by strong semiconductor-driven exports.
The Composite Business Sentiment Index (CBSI) for all industries came in at 98.9 in April, up four points from the previous month, according to the Bank of Korea (BOK).
The reading marked the highest level since October 2022 and the strongest monthly increase since May 2023.
In Australia, the Consumer Price Index (CPI) rose 4.2% in the 12 months to April 2026, according to the Australian Bureau of Statistics (ABS), slightly below market expectations of a 4.4% increase.
In Japan, Bank of Japan Governor Kazuo Ueda said central banks should avoid viewing oil price movements in isolation, warning that temporary energy shocks can become persistent if they influence wages, expectations and broader price-setting behaviour.
Ueda said the same oil price shock could have very different effects depending on underlying economic conditions, including wage growth and inflation expectations.
He noted that when expectations are already elevated, the risk of second-round inflation effects increases significantly.
On Wall Street, U.S. markets closed mixed on Tuesday, with the Dow Jones Industrial Average falling 0.2%, while the S&P 500 gained 0.6% and the Nasdaq rose 1.2%, with both the S&P and Nasdaq reaching fresh record highs.
In commodities, Brent crude rose 3.5% to US$96.67 per barrel, while spot gold fell 1.4% to US$4,506.59 per ounce.
In China, the SSE Composite Index slipped 0.2% to 4,145.4, while the CSI 300 gained 0.5% to 4,947.8.
Hong Kong’s Hang Seng Index was broadly flat at 25,599.5, and India’s BSE Sensex declined 0.6% to 76,009.7.
European markets ended mixed on Tuesday, with the UK’s FTSE 100 up 0.2% at 10,491.4, Germany’s DAX down 0.8% at 25,184.9, and France’s CAC 40 falling 1.0% to 8,173.1.
