Asian markets were broadly steady on Thursday as investors looked past the formal signing of a US-Iran interim peace agreement and focused instead on what comes next for oil, rates and risk appetite.
The deal extends an April ceasefire by 60 days and aims to create room for a final truce, but it has not removed the political risk around enforcement.
US President Donald Trump warned that attacks could resume if Tehran fails to meet its commitments.
That kept the mood cautious, even as cheaper crude offered relief to economies exposed to imported energy and helped limit deeper losses across regional equities.
Peace deal lowers oil risk, not political risk
The first market reaction was visible in crude.
Brent fell 1.4% to $78.41 a barrel, while US crude dropped 1.25% to $75.83 as traders priced in a lower chance of prolonged disruption through the Strait of Hormuz.
The agreement, now released by both governments, gives Washington and Tehran another 60 days to negotiate a lasting settlement.
It has calmed one of the biggest inflation shocks of the year, but investors are not treating it as a clean end to the conflict.
Asia holds steady as Japan stands out
MSCI’s broadest index of Asia-Pacific shares outside Japan was little changed, reflecting a market that wants confirmation before taking a stronger view.
Japan was the clear exception. The Nikkei pushed past 71,000 for the first time, powered by demand for semiconductor and artificial-intelligence shares.
South Korea’s Kospi added 0.9%, helped by the same chip-led optimism.
US S&P 500 futures also rose 0.81%, suggesting some bargain hunting after Wall Street’s overnight sell-off.
The region’s bond market was less relaxed. Japan’s 10-year government bond yield rose two basis points to 2.62%, close to its highest finish since June 16.
That move showed investors are still watching global rate risks, even as oil eases.
Fed message keeps dollar supported
Wall Street’s fall on Wednesday reflected a sharper repricing of US monetary policy.
The Dow lost 0.98%, the S&P 500 dropped 1.21% and the Nasdaq slid 1.34% after Fed Chair Kevin Warsh stressed the need to control inflation.
New projections showed nine of 18 policymakers now expect a rate increase later this year.
The shift pushed Treasury yields higher. The 10-year yield stood near 4.47%, while the two-year yield, more sensitive to Fed expectations, touched 4.1759%.
The dollar held firm near 160.65 yen after touching its strongest level since July 2024.
The Bank of England is also expected to hold rates on Thursday, putting the focus on policymakers’ tone rather than the decision. Spot gold was steady near $4,309 an ounce.
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