SINGAPORE, April 1 – Financial markets across Asia experienced substantial gains during Wednesday’s trading session as investors responded optimistically to signals that the Iran conflict might reach a resolution in the near future, while stronger-than-anticipated economic data from March helped drive recoveries in Korean and Japanese equities.
The MSCI Asia-Pacific index excluding Japan climbed 2.7%, breaking a four-session decline as South Korea’s Kospi index soared as high as 5.5%. Japan’s Nikkei 225 also posted gains of 3.9% at its peak, following comments from U.S. President Donald Trump suggesting America could conclude its military operations against Iran in two to three weeks without requiring Tehran to agree to any deal beforehand.
“They’re still quite far apart in terms of what a truce means, or what peace means, but the market is embracing the fact that they are talking,” explained Rodrigo Catril, a currency strategist with National Australia Bank in Sydney.
“That’s a positive sign, at least in terms of signalling or willingness to end the conflict,” Catril noted during a podcast appearance. “Whether a compromise can be reached remains to be seen,” he continued. “While this is all happening, attacks are continuing from both sides.”
The President is scheduled to deliver a national address regarding Iran at 9 p.m. Wednesday (0100 GMT Thursday), according to White House spokesperson Karoline Leavitt’s announcement on X. Following this news, S&P 500 e-mini futures rose 0.3% while Nasdaq futures advanced 0.5%.
Wall Street markets had already posted strong gains Tuesday as investors wagered on a possible resolution to the conflict, pushing the S&P 500 up 2.9%, though oil markets showed more restrained movement as Asian trading commenced. Brent crude futures increased 1.1% to reach $105.16 per barrel, recovering some ground from the prior session’s losses.
Korean equities were positioned for their largest single-day gain in two weeks, with Samsung Electronics jumping 8% and SK Hynix climbing 7.8%. This surge followed news that exports had increased 48.3% compared to the same period last year in March, far exceeding analyst projections. Additionally, a purchasing managers’ index revealed that the nation’s manufacturing sector expanded at its fastest rate in over four years during March, driven by semiconductor demand and new product introductions.
In Japan, corporate confidence among major manufacturers showed improvement during the first quarter, based on a closely monitored survey published Wednesday. This indicates that growing economic uncertainty stemming from Middle Eastern tensions has not yet affected business optimism.
The dollar index, which tracks the currency’s performance against six major peers, edged up 0.1% to 99.8070 after recording its steepest single-day decline since March 19 on Tuesday. This movement reflected traders’ revised expectations regarding potential Federal Reserve policy adjustments earlier than previously anticipated.
Federal funds futures markets now indicate a 32% likelihood of a 25-basis-point interest rate reduction at the central bank’s meeting concluding July 29, up significantly from just 7.5% probability the previous day, according to CME Group’s FedWatch monitoring tool.
The 10-year U.S. Treasury yield decreased 1.2 basis points to 4.297%.
In digital currency markets, bitcoin declined 0.3% to $67,988.87, while ethereum dropped 0.2% to $2,100.94.
