Kospi surges 6%, Nikkei 4% as Asian markets rally on easing tensions

Asian stocks and bonds climbed at the start of Wednesday’s session on hopes the Iran conflict could ease, while stronger March data buoyed Korean and Japanese markets.

US President Donald Trump said strikes on Iran could end within two to three weeks and will address the nation, helping lift S&P 500 futures 0.3% and Nasdaq futures 0.5%.

Asian stocks rally on Iran de-escalation hopes, strong data

MSCI’s broadest index of Asia-Pacific shares outside Japan was up 2.7%, snapping a four-day losing streak.

South Korea’s Kospi surged as much as 5.5%, while Japan’s Nikkei 225 jumped as much as 3.9% at one point.

Investors took encouragement from signs of dialogue.

While the two sides remain “quite far apart” on a truce, the market is “embracing the fact that they are talking,” said Rodrigo Catril at National Australia Bank, calling it “a positive sign” even as “attacks are continuing from both sides,” Reuters reported.

Korean and Japanese equities lead gains

South Korean stocks were on track for their sharpest jump in two weeks, led by Samsung Electronics up 8% and SK Hynix up 7.8%.

Exports soared 48.3% year-on-year in March, beating expectations, and a purchasing managers’ index showed factory activity expanding at the strongest pace in more than four years, helped by semiconductor demand and new product launches.

In Japan, a closely watched survey showed business sentiment among large manufacturers improved in the three months to March, suggesting rising uncertainty from the Middle East has yet to dent morale.

Oil, dollar and bonds steady

Oil was subdued relative to equities, with Brent crude up 1.1% to $105.16 a barrel, retracing part of the previous day’s decline as Asian trading resumed.

The US dollar index edged up 0.1% to 99.8070 after its biggest one-day drop since March 19 on Tuesday.

US Treasuries firmed, with the 10-year yield down 1.2 basis points at 4.297% as bonds recovered alongside risk assets.

Fed bets shift, Wall Street stages rebound

Traders reassessed the odds that the Federal Reserve may move earlier than expected.

Fed funds futures implied a 32% probability of a 25-basis-point cut at the two-day meeting ending July 29, up from 7.5% a day earlier, according to the CME Group’s FedWatch tool.

US stocks rallied on Tuesday on hopes of an off-ramp to the war, with the S&P 500 up 2.9%.

Crypto little changed

In digital assets, Bitcoin was down 0.3% at $67,988.87, while Ether slipped 0.2% to $2,100.94.

Trump to address Iran tensions

Trump will provide an update on Iran in an address to the nation, White House spokeswoman Karoline Leavitt said.

Markets will watch for any concrete signs of de-escalation and whether recent risk appetite extends beyond an initial relief rally.

According to Reuters, the session’s moves reflect both geopolitical developments and improving regional data, leaving investors focused on whether the talks progress and whether supportive economic signals persist.