Asia stocks rise after Trump postpones Iran decision; Japan spooked by hot CPI

Investing.com-- Most Asian stocks firmed on Friday after U.S. President Donald Trump postponed a decision on U.S. involvement in the Israel-Iran war by two weeks, offering markets some near-term relief. 

But Japanese shares lagged after hot consumer inflation data and hawkish Bank of Japan comments ramped up expectations that the central bank will hike interest rates further in the coming months. 

Regional markets took few trading cues from Wall Street, which was closed on Thursday. S&P 500 Futures fell 0.3% in Asian trade, remaining negative despite Trump’s statement on Iran. 

U.S. stock markets were still reeling from hawkish comments from the Federal Reserve, as Chair Jerome Powell remained non-committed to future rate cuts and even trimmed the central bank’s rate cut outlook for 2026. 

Japan’s Nikkei dips as hot CPI furthers BOJ rate hike bets 

Japan’s Nikkei 225 and TOPIX indexes lagged most of their Asian peers on Friday, losing 0.1% and 0.3%, respectively. Export-oriented stocks were the biggest weight, as they were pressured by some strength in the yen. 

Japanese core consumer price index inflation, which excludes volatile fresh food prices, surged to a near 2-½ year high in May, data showed on Friday, while underlying inflation hit an over one-year high. 

The data was followed by the minutes of the BOJ’s early-May meeting, which showed several members of the BOJ’s board supporting the bank’s rate hike path. 

The strong CPI data also came just days after the BOJ kept interest rates steady, but warned that it was likely to hike if inflation continued to rise. Friday’s data spurred increased bets that the BOJ could hike rates by as soon as July. 

Still, Japanese markets were sitting on some gains for the week. 

Asia tech advances, others less upbeat 

Tech-heavy Asian bourses were the best performers for the day, as the sector recouped recent losses on some improvement in risk appetite. 

Hong Kong’s Hang Seng index rose 0.8%, while South Korea’s KOSPI jumped 1.1% to its highest level since early-2022. 

Other, non-tech indexes were less upbeat. Several Asian markets were also nursing losses for the week, as risk appetite was eroded by the Israel-Iran war.

The White House said on Thursday that Trump will decide on whether to join the war within two weeks, although the president was still holding out for nuclear talks with Tehran.

But this came as strikes between Israel and Iran continued into an eighth day, with the war showing few signs of deescalating. 

China’s mainland Shanghai Shenzhen CSI 300 and Shanghai Composite indexes rose 0.3% and 0.1%, respectively, showing little reaction to the People’s Bank leaving its benchmark loan prime rate unchanged. 

But the PBOC is still expected to trim the rate further this year, as Beijing moves to shore up sluggish economic growth. 

Australia’s ASX 200 shed 0.5%, while Singapore’s Straits Times index rose 0.1%. 

Gift Nifty 50 Futures for India’s Nifty 50 index rose 0.2%, pointing to a positive open.