Asia-Pacific markets traded higher on Friday as investors assessed diplomatic efforts between the United States and Iran aimed at securing a peace agreement in the Middle East.
Investor sentiment improved amid retreating oil prices in U.S. trading overnight, on hopes of progress in negotiations, although reports that Tehran plans to retain its enriched uranium stockpile within the country continued to complicate discussions with Washington.
U.S. President Donald Trump has made dismantling Iran’s nuclear program a central objective of the military campaign against Tehran, while Iranian officials have resisted calls to transfer enriched uranium overseas.
By 12:00 pm AEST (2:00 am GMT), Australia’s S&P/ASX 200 had gained 0.5%, South Korea’s KOSPI 200 rose 0.4%, and Japan’s Nikkei 225 rallied 2.1%.
Japanese markets were supported by easing inflation data, although concerns remain that higher energy prices linked to the Middle East conflict could reignite price pressures in the coming months.
Japan’s headline inflation rate eased to 1.4% in April from 1.5% previously.
Annual core consumer inflation, which excludes volatile fresh food prices, also slowed to a four-year low of 1.4%, below market expectations for a 1.7% increase and down from 1.8% in March.
The slowdown was partly driven by a 10.6% decline in education fees, which offset continued increases in food and other consumer costs.
A separate inflation measure closely monitored by the Bank of Japan, which excludes both fresh food and fuel prices, rose 1.9% in April after increasing 2.4% in March.
In South Korea, consumer sentiment improved in May, supported by strong semiconductor exports and gains in equity markets.
The Bank of Korea said its composite consumer sentiment index rose 6.9 points from April to 106.1, marking the largest monthly increase since June last year and lifting the reading above the 100-point threshold for the first time in two months.
Overnight in the United States, Wall Street closed higher, with the Dow Jones Industrial Average gaining 0.6% to a fresh record high. The S&P 500 rose 0.2%, while the Nasdaq Composite added 0.1%.
Commodity markets were mixed on Thursday. ICE Brent crude fell 2.3% to settle at US$102.58 a barrel as hopes for easing geopolitical tensions weighed on energy prices. Spot gold ended little changed at $4,542.57 an ounce.
Chinese markets delivered a mixed performance on Thursday, with the Shanghai SSE Composite Index falling 2% to 4,068.6, while the CSI 300 edged 0.2% higher to 4,796.1.
Hong Kong’s Hang Seng Index closed 1% lower at 25,386.5, while India’s BSE Sensex slipped 0.2% to 75,183.4.
European markets also finished mixed overnight. Britain’s FTSE 100 rose 0.1% to 10,443.5, Germany’s DAX fell 0.5% to 24,606.8, and France’s CAC 40 declined 0.4% to 8,086.0.
