Japanese and South Korean equities advanced on Friday after a late rebound on Wall Street, as traders bet that tensions in the Iran war may be edging closer to a managed outcome.
Japan’s Nikkei 225 rose 1.4%, while South Korea’s Kospi climbed 2.7%, following a turnaround in the S&P 500, which erased a 1.5% intraday loss to finish 0.1% higher. The shift in sentiment came as oil prices pulled back from recent highs after reports that Iran is working with Oman on a protocol to monitor shipping through the Strait of Hormuz, which has remained effectively shut since the conflict began.
Currency markets reflected the improving tone, with the US dollar weakening against major peers as demand for safe-haven assets eased. Treasury futures in Asia traded largely flat, with the US cash market set to reopen later for a shortened trading session.
Several Asia-Pacific markets, including Australia, New Zealand, Hong Kong, Singapore, the Philippines, and Indonesia, remained closed for the Good Friday holiday. US equities will also be shut, though key economic releases, including the March nonfarm payrolls report, are still due.
Risk sentiment weakened earlier in the week after remarks from US President Donald Trump did little to ease concerns about a near-term resolution to the conflict. Although he had previously outlined a two-to-three-week timeline, Trump signaled that military operations would continue and warned of “extremely aggressive” action.
Subsequent strikes on Iranian infrastructure, including a century-old medical research centre in Tehran, steel facilities, and a bridge near the capital, have drawn criticism. Iranian officials and several analysts argue that these targets qualify as civilian infrastructure, raising concerns about further escalation and humanitarian consequences.
Oil markets reacted sharply to the heightened rhetoric. Prices surged above $110 per barrel on Thursday, with West Texas Intermediate jumping around 12% to $112 and Brent settling near $109. Europe’s diesel benchmark climbed past $200 per barrel for the first time since 2022, underscoring supply fears tied to disruptions in the Strait of Hormuz.
Despite the volatility in energy markets, traditional safe-haven assets such as gold showed limited movement on Friday, indicating a cautious, wait-and-watch stance among investors as the geopolitical situation remains fluid.
How are crypto equities holding up?
Crypto-linked equities delivered a mixed performance amid the escalating war in the Middle East. Coinbase shares fell 0.9% at the end of Thursday, while Robinhood declined 1.73%. Galaxy Digital bucked the trend, gaining 1.5% by the close.
Crypto mining stocks saw much better gains. Notably, Marathon Digital rose 8.3%, while Riot Platforms, Hut 8 Mining, and Bitfarms were up by 2.47%, 1.5%, and over 1%, respectively.
However, accumulation-focused firms did not follow the same trend. Strategy, the Bitcoin-focused treasury company led by Michael Saylor, dropped 2.4%, while Bitmine Immersion Technologies (BNMR) fell 1.2%.
The divergence suggests investors favoured mining firms, which tend to track Bitcoin price movements more closely, amid ongoing geopolitical uncertainty.