Asia stocks rise on U.S.-Iran peace hopes, soft Japan CPI

Asian equity markets rose on Friday after Iran described a U.S. proposal as “partly bridged” toward a potential agreement and Japan reported slower inflation for April. The developments supported regional stocks and eased some pressure on government bond markets.

Market participants treated Iran's description as increasing the odds of a pause in fighting in the Middle East, prompting short covering in sectors sensitive to geopolitics. U.S. crude and Brent both fell for a second session, with WTI down about 1.1% and Brent down about 0.2% on Wednesday, May 21.

Japan's core consumer price index, which excludes fresh food but includes energy, rose 1.4% year-on-year in April, softer than forecasts of 1.7%. The Bank of Japan's preferred core-core CPI, which excludes fresh food and energy, rose 1.9% year-on-year in April after 2.4% in March, below the BOJ's 2% target.

Benchmark Asia Pacific indexes opened higher. The Nikkei 225 led regional gains, trading about 1.8% higher at the start of the session. The Hang Seng and KOSPI each rose about 0.5%, the ASX 200 gained about 0.4%, and Singapore's STI was up about 0.2%. U.S. equities had earlier extended a relief rally, with the Dow hitting a fresh all-time closing high in the prior session.

U.S. Treasury yields fell, with the 10-year around 4.57% and the 30-year near 5.09%, reflecting reduced safe-haven demand. The U.S. dollar index was largely unchanged. The yen weakened against the dollar and probed the 159.10/159.35 per USD area, a level market watchers say could trigger verbal intervention by Japanese authorities. Spot gold traded near recent averages.

Minutes from the Federal Reserve showed officials are monitoring persistent U.S. inflation and could consider further rate increases. Japan's weaker inflation readings gave the Bank of Japan more room to delay tightening, widening policy differences between the Fed and the BOJ.

On the corporate front, Samsung's union suspended a planned strike after a tentative pay agreement, removing an immediate risk to semiconductor and memory supply chains. Interest in large technology listings, including filings tied to space and artificial intelligence firms, continued to attract investor attention.

Technical analysts noted the Nikkei's return above its 20-day moving average. Short-term support was identified near 61,955, while the previous all-time area around 63,270–63,788 was cited as the next resistance zone.

Markets will look for fresh data and headlines for direction in coming sessions, including U.K. retail sales, the University of Michigan consumer sentiment final reading and any updates on U.S.-Iran negotiations.