Asia-Pacific markets traded higher on Friday as investors weighed renewed military activity involving Iran against signs that Washington and Tehran were moving closer to a temporary agreement to halt their three-month conflict.
By 11:25 am AEST (1:25 am GMT), Australia’s S&P/ASX 200 rose 0.8%, while Japan’s Nikkei 225 climbed 1.8% to a fresh record high. South Korea’s KOSPI 200 surged 2.1%, also reaching a record high.
Investor sentiment improved after reports emerged that the United States and Iran were nearing a temporary ceasefire arrangement, despite continued military incidents in the region.
In South Korea, economic data showed industrial output fell 0.6% in April from the previous month, according to figures released by the Ministry of Data and Statistics.
Retail sales also weakened sharply, contracting 3.6%, while facility investment declined amid uncertainty linked to Middle East tensions.
Japanese economic data was more upbeat. Industrial output in April rose 0.8% month-on-month, outperforming expectations for a 0.9% contraction and improving from a fall of 0.4% in the previous month.
Retail sales in Japan increased 2.1% year-on-year in April 2026, accelerating from a revised 1.4% gain in March and exceeding forecasts for a 1.3% rise. The result marked the fastest pace of growth since April 2025, supported by government stimulus measures aimed at boosting consumption and easing cost pressures.
Japan’s unemployment rate declined to 2.5% in April, below expectations and down from 2.7% in March.
Meanwhile, inflation data from Tokyo showed annual core consumer prices remained below the central bank’s 2% target for a fourth consecutive month in May. The Tokyo core consumer price index (CPI), which excludes fresh food prices, rose 1.3% year-on-year, slowing from 1.5% in April and missing expectations for a 1.5% increase.
The softer inflation reading was partly attributed to government subsidies for fuel and education, which offset higher raw material costs linked to the U.S.-Israeli conflict with Iran.
On Wall Street overnight, major U.S. benchmarks closed at fresh record highs. The Dow Jones Industrial Average added 0.1%, the S&P 500 gained 0.6%, and the Nasdaq Composite advanced 0.9%.
In commodities trading, ICE Brent crude settled 0.5% higher at US$92.70 per barrel, while spot gold rose 0.9% to US$4,495.40 per ounce.
Chinese markets finished modestly higher on Thursday, with the SSE Composite Index edging up 0.1% to 4,098.6 and the CSI 300 gaining 0.1% to 4,914.2.
Hong Kong’s Hang Seng Index fell 1.3% to 25,006.2, while India’s BSE Sensex was closed for a public holiday.
European markets ended lower overnight. Britain’s FTSE 100 declined 0.8% to 10,426.0, Germany’s DAX slipped 0.3% to 25,092.3, and France’s CAC 40 eased 0.2% to 8,188.9.



