Markets in Japan, South Korea and Australia advanced, with the broader MSCI Asia Pacific Index rising 0.8% at the open, in hope of a potential fall in oil prices.
US equity futures were largely steady after the S&P 500 climbed 1% in the previous session, extending a recovery that erased losses linked to the Iran conflict.
Crude prices eased, with Brent falling 1.9% to $97.46 a barrel, supporting sentiment. Treasuries were steady in early Asian trade after gains in the US session, while the Bloomberg Dollar Spot Index edged lower.
Gold bounced back after two sessions of declines to trade near $4,755 an ounce, and Bitcoin rose to around $74,400.
Investor sentiment improved after Trump said Iran had reached out to his administration for potential peace talks. However, Tehran has not yet confirmed any such discussions, keeping markets cautious about possible escalation.
“The markets really want to give peace a chance, accentuating the positives and downplaying the negatives as tensions between the US and Iran simmer away,” Kyle Rodda, analyst at Capital.com Inc. said
“Despite this, the risk for further volatility remains high, with headline risk continuing to drive the action,” she added.
Meanwhile, in a move to pressure Iran to loosen its grip on the waterway, the US blockade of the Strait of Hormuz, a key transit route for roughly a fifth of global oil and LNG shipments, has begun to disrupt shipping flows. At least two tankers have reportedly altered their routes after a military deadline to exit Iranian waters passed.
The conflict, which began in late February following joint US and Israeli action, has prompted efforts to contain energy prices, including coordinated releases from global emergency reserves and some easing of sanctions on Iranian oil shipments. Despite this, crude continues to trade close to $100 per barrel.
In currency markets, the Singapore dollar pared earlier gains after the central bank tightened monetary policy settings.
Bond markets are increasingly factoring in inflation risks driven by higher oil prices and a rise in US consumer prices. Japan’s 10-year yield touched its highest level since 1997 earlier this week before easing. In the US, money markets indicate less than a 20% probability of a rate cut by December.
(With Inputs From Agencies)
