Asian Stocks Rise on Hopes for End to US-Iran Conflict

Tokyo's Nikkei index rose 5.7 percent to 62,915.87 on Thursday to lead gains across Asian stock markets. The advance came as investors responded to growing optimism that the conflict between the United States and Iran is nearing an end and that the Strait of Hormuz will reopen to shipping.

Stocks have risen and oil prices have fallen this week on expectations that Washington and Tehran will reach an agreement. The Strait of Hormuz has been effectively closed since the start of March, limiting transport of about one-fifth of global crude oil shipments.

Risk sentiment increased after President Donald Trump said an agreement was near. The day before, he had paused efforts to help stranded ships pass through the strait after those operations drew Iranian attacks that threatened a fragile ceasefire. news outlet reported that both sides were close to agreement on a one-page memorandum of understanding to end the war, open the strait and set a framework for more detailed nuclear talks.

Iran has yet to respond to the U.S. offer. A foreign ministry spokesperson told local media it was still under review. A parliament speaker warned against any attempt to force surrender. Pakistani Prime Minister Shehbaz Sharif, who took part in initial talks last month in Islamabad, said he was very hopeful.

Oil prices were largely unchanged on Thursday after declining around 10 percent over the previous two days. West Texas Intermediate crude stood at $95.08 a barrel while Brent North Sea Crude was at $101.32 a barrel.

Investors tracked another record day on Wall Street and directed fresh buying into technology shares tied to artificial intelligence. Companies including Microsoft, Apple and Alphabet reported standout earnings that contributed to the positive sentiment.

Tokyo's Nikkei surged as investors returned from a holiday. SoftBank rose more than 15 percent while chip-related firms Tokyo Electron and Advantest also posted strong gains. Markets in Hong Kong, Shanghai, Sydney, Singapore, Taipei, Wellington, Manila and Jakarta also recorded gains.

The prospect of lower oil prices reduced inflation concerns and contributed to a rise in gold prices of more than 3 percent on Wednesday. The yen rose to a 10-month high against the dollar, reaching 156.23 yen per dollar. Local media reported that the Japanese government spent between $32 billion and $38 billion to buy yen in the market last Thursday, citing Bank of Japan data.

Japan's top currency official declined to comment on the reports. Stephen Innes at SPI Asset Management said traders had embraced the possibility of the conflict shifting from military action to negotiations while AI-related investment added to the positive momentum in risk assets.