Asia-Pacific markets traded mixed on Thursday following a positive session on Wall Street overnight, where two of the three major United States benchmarks closed at fresh record highs.
The broader regional rally came after President Donald Trump warned that Iran would be bombed “at a much higher level” if it failed to agree to a peace deal, even as reports suggested Washington and Tehran were nearing an agreement to end the conflict.
By 10:50 am AEST (12:50 am GMT), Australia’s S&P/ASX 200 had gained 1%, while South Korea’s KOSPI 200 edged 0.1% lower. Japan’s Nikkei 225 surged 4.3% to a fresh record high.
Investors also digested minutes from the Bank of Japan’s latest policy meeting, which showed several board members believed interest rates may need to rise if the Iran war-driven energy shock persisted and fuelled broader inflationary pressures.
According to the minutes, one policymaker said the BOJ should raise rates “without long intervals between adjustments”, while another stated the central bank "would need to raise the policy interest rate without hesitation” if the Japanese economy remained resilient despite the Middle East conflict.
The minutes also noted: “many members expressed the recognition that, if supply shocks due to the increased tension over the situation in the Middle East were temporary, the basic response for the Bank would be to ‘look through’ their impact.”
“These members continued that, on the other hand, if these shocks became prolonged and gave rise to concerns over the second-round effects on general prices, it would be necessary for the Bank to respond after examining the impact on inflation expectations and underlying inflation.”
In the U.S. overnight, the Dow Jones Industrial Average rose 1.2%, while the S&P 500 advanced 1.5% and the Nasdaq Composite climbed 2%, with both the S&P 500 and Nasdaq closing at new record highs.
Commodity markets were volatile on Wednesday. Brent Crude fell 7.8% to settle at US$101.27 a barrel, while spot gold rose 3% to US$4,691.11 an ounce.
Chinese equities also finished higher in the previous session, with the SSE Composite Index rising 1.2% to 4,160.2 and the CSI 300 adding 1.5% to 4,877.1.
In Hong Kong, the Hang Seng Index gained 1.2% to 26,213.8, while India’s BSE Sensex climbed 1.2% to 77,958.5.
European markets also rallied strongly overnight. Britain’s FTSE 100 rose 2.2% to 10,438.7, Germany’s DAX gained 2.1% to 24,918.7, and France’s CAC 40 advanced 2.9% to 8,299.4.
