Asia report: Nikkei leads gains as investors shrug off Iran risk

(Sharecast News) - Asia-Pacific markets rallied on Thursday, with Japan's Nikkei 225 topping 62,000 for the first time, as investors looked past renewed US threats against Iran and focused instead on signs that Washington and Tehran could be nearing a deal.

"Global equities pushed further into record territory as optimism around a potential US-Iran agreement extended the risk rally," said Patrick Munnelly, market strategy partner at TickMill.

"The MSCI All Country World Index rose 0.3%, while MSCI Asia gained 1.9% to a fresh high, helped by a strong rebound in Japan's Nikkei 225, which also touched an intraday record."

Sentiment was supported by record highs on Wall Street and hopes for a diplomatic breakthrough, even after US president Donald Trump warned that Iran would be bombed "at a much higher level" if it failed to agree to a peace deal.

Trump said in a Truth Social post that the US military offensive known as Operation Epic Fury "will be at an end" if Iran "agrees to give what has been agreed to, which is, perhaps, a big assumption."

If that happened, he said the US naval blockade of Iranian ports in the Gulf of Oman would "allow the Hormuz Strait to be OPEN TO ALL, including Iran."

Oil prices fell sharply as investors focused on the prospect of de-escalation, with Brent crude futures last down 2.09% on ICE at $99.15 per barrel, and the NYMEX quote for West Texas Intermediate falling 2.24% to $92.95.

"The geopolitical relief trade remains centred on oil and the Strait of Hormuz," Munnelly said.

"Brent held near $102 per barrel, preserving most of the prior session's losses, as markets priced a better chance that a US-Iran deal could allow energy transit through the Strait to resume.

"The important distinction is that prices have stabilised rather than collapsed - the market is discounting improved odds, not confirmed resolution.

"That leaves crude vulnerable to headline risk in both directions, particularly with inventories already tightening and any renewed obstruction to flows likely to quickly rebuild risk premium."

Tokyo leads region-wide gains

Japan's Nikkei 225 surged 5.58% to 62,833.84 as markets returned from holiday, while the broader Topix rose 3% to 3,840.49.

Ibiden jumped 22.43%, Sumco Corporation gained 19.74%, and SoftBank Group advanced 18.44%.

In China, the Shanghai Composite rose 0.48% to 4,180.09, while the Shenzhen Component gained 1.18% to 15,641.89.

Suzhou TZTEK Technology climbed 12.2%, Guangxi Radio and Television Information Network added 10.07%, and Henan Ancai Hi-tech also rose 10.07%.

Hong Kong's Hang Seng Index advanced 1.57% to 26,626.28.

Techtronic Industries jumped 10.31%, Kuaishou Technology gained 7.56%, and Chow Tai Fook Jewellery Group rose 7.29%.

South Korea's Kospi 100 rose 1.91% to 8,895.86, led by Samsung Engineering, which surged 21.51%.

Hankook Tire gained 8.74%, while SKC added 8%.

"South Korea's rise is becoming a structural market story as much as a cyclical one, with its equity market now overtaking Canada to become the seventh-largest globally by value, underlining its role as a key destination for tech and AI-linked capital," Munnelly said.

Sydney in the green despite unexpected trade deficit

Turning down under, Australia's S&P/ASX 200 climbed 0.96% to 8,878.10, with IperionX up 10.25%, Megaport rising 9.38%, and Vault Minerals gaining 9.21%.

Australia unexpectedly recorded a trade deficit of AUD 1.84bn in March, according to the Australian Bureau of Statistics, missing expectations for a AUD 4.25bn surplus and reversing sharply from a AUD 5bn surplus in February.

Exports fell 2.7% month on month, weighed down by weaker shipments of metal ores, coal and sugar, although mineral fuel exports rose 4.6%.

Imports surged 14.1%, driven mainly by capital goods, with automated data processing equipment shipments up 204% from the previous month amid rising interest in artificial intelligence infrastructure.

Australia also imported larger volumes of crude petroleum and gasoline after a major fire and outage at a key refinery in Victoria.

Across the Tasman Sea, New Zealand's S&P/NZX 50 rose 0.95% to 13,270.61.

Vista Group International gained 5.05%, Infratil rose 4.05%, and A2 Milk Company added 2.52%.

Dollar weaker against regional G10 peers

In currencies, the dollar was last down 0.02% on the yen to trade at JPY 156.36, as it fell 0.28% against the Aussie to AUD 1.3780, and declined 0.28% on the Kiwi to NZD 1.6745.

"FX was quieter after Wednesday's sharp yen move, with USD-JPY steady around 156.30 in Asian hours," Munnelly said.

"The absence of follow-through does not remove intervention risk; if anything, it leaves markets more alert to the authorities' reaction function after the prior surge was widely linked to speculation of official action."

Reporting by Josh White for Sharecast.com.