- Japan's Nikkei 225 rose 1.36% amid slower-than-expected core inflation in April
- South Korea's Kospi gained 0.52% and Kosdaq jumped over 3% on positive market sentiment
- Oil price concerns persist due to Strait of Hormuz tensions and potential shipping tolls
Asia-Pacific markets opened higher on Friday as investors weighed diplomatic efforts between the U.S. and Iran to reach a peace deal in the Middle East, while lower oil prices supported sentiment across equities.
Japan's Nikkei 225 rose 1.36%, while the Topix added 0.55%. Data showed Japan's core inflation slowed more than expected in April to its lowest level since March 2022, reducing expectations of an early interest rate increase by the Bank of Japan.
Core inflation, which excludes fresh food prices, stood at 1.4%, below the 1.7% forecast in a Reuters poll and lower than March's 1.8% reading.
South Korea's Kospi gained 0.52%, while the Kosdaq jumped more than 3%. Australia's S&P/ASX 200 rose 0.5%. Hong Kong's Hang Seng Index futures traded at 25,568, above the index's previous close of 25,386.52.
Oil, Inflation Watch
Investors continued to monitor risks linked to the Strait of Hormuz, where concerns over a prolonged disruption have pushed bond yields higher in recent sessions. Traders fear elevated oil prices could fuel inflation and force central banks to keep interest rates higher for longer.
Even so, investors have largely looked past those risks since the conflict began in late February, helping global equities reach record highs amid renewed interest in artificial intelligence-linked stocks.
Iran said the latest U.S. proposal had partly narrowed differences between the two sides. However, comments from Iran's Supreme Leader on retaining the country's uranium stockpile, along with a dispute over shipping tolls in the Strait of Hormuz, clouded prospects for a breakthrough.
Iran is also discussing with Oman the possibility of establishing a permanent toll system that would formalise its control over maritime traffic through Hormuz. Trump said the U.S. wanted the strait to remain open and free of tolls.
U.S. Secretary of State Marco Rubio said there were "some good signs" that a deal with Iran could be reached and said Pakistani mediators were expected to travel to Tehran, according to the Financial Times. Iranian President Masoud Pezeshkian said, "we will never back down" in the talks.
The conflict has also increased pressure on emerging Asian markets, pushing some regional currencies and bond yields closer to levels investors had previously considered unlikely.
(With inputs from Bloomberg.)
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.