Women walk past a banner depicting supreme leader Ayatollah Mojtaba Khamenei along a street in Tehran on May 6, 2026. Stocks have soared and oil has plunged this week on hopes for an end to the US-Iran conflict. (Photo: AFP)
HONG KONG – The Nikkei index in Tokyo soared on Thursday to lead another strong rally across Asia stocks, fuelled by growing optimism the Iran war is close to ending and the revival of demand for all things AI.
Oil prices also remained subdued after steep losses, reflecting hopes that Washington and Tehran will conclude the conflict and reopen the Strait of Hormuz, which has been effectively closed since the start of March, choking off a fifth of the world’s crude.
Risk sentiment got a huge boost on Wednesday when President Donald Trump said an agreement was near, a day after he paused efforts to help stranded ships through Hormuz, which drew Iranian attacks and threatened their fragile ceasefire.
If “Iran agrees to give what has been agreed to” the war would be over, the US president said. But if not, the bombing would resume “at a much higher level and intensity”.
He later told reporters: “We’ve had very good talks over the last 24 hours, and it’s very possible that we’ll make a deal.”
The US news outlet Axios cited two US officials as saying 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 US offer, with foreign ministry spokesman Esmaeil Baqaei telling local media it was “still under review”.
Parliament speaker, Mohammad Bagher Ghalibaf, who has taken the lead in negotiations, warned Washington trying to “force us to surrender”.
Pakistani Prime Minister Shehbaz Sharif, a key figure in initial talks in Islamabad last month, said he was “very hopeful”.
Oil prices were flat on Thursday, having fallen around 10% over the previous two days.
Investors, who have largely remained optimistic that a deal can be reached, tracked another record day on Wall Street and pushed Asian markets higher.
The gains have also been helped by a fresh wave of cash back into the tech sector as traders snap up all things AI, helped by standout earnings from US giants including Microsoft, Apple and Alphabet.
Tokyo’s Nikkei soared more than five percent as investors there returned from a long holiday, with tech investment titan SoftBank rocketing more than 15% while chip-linked firms Tokyo Electron and Advantest also ratcheted up big gains.
Seoul extended Wednesday’s surge that took it past 7,000 points for the first time, with Samsung also up following its meteoric rise to pass the $1 trillion market capitalisation mark.
Hong Kong, Shanghai, Sydney, Singapore, Taipei, Wellington, Manila and Jakarta also clocked up big gains. The Stock Exchange of Thailand was trading around 1,520 points, up 4 points from the day before, as the morning session began.
The prospect of cheaper oil prices tempered worries about inflation, which also helped gold rally more than three percent on Wednesday.
“”Taders aggressively embraced the idea that the Iran war may finally be shifting from missile trajectories to negotiation tables, while the AI frenzy simultaneously poured jet fuel onto the risk rally,” said Stephen Innes of SPI Asset Management.
“The result was one of those rare sessions where nearly every macro domino fell in perfect sequence. Oil collapsed, bonds rallied, the dollar sank, gold exploded higher” and stocks surged.
Investors in Tokyo were also closely watching the yen after speculation of intervention by the Japanese government to prop up the beleaguered currency.
The unit, which has been hit by surging oil prices and a rush to the safe-haven dollar, hit a 10-month high against the greenback Wednesday, in the latest of a series of spikes in recent days that have fuelled rumours that officials have provided support.
The government spent 38 billion buying yen in the market last Thursday, local media reported, quoting Bank of Japan data.
Atsushi Mimura, Japan’s top currency official, on Thursday declined to comment, local media reported.
Key figures as of 0230 GMT
Tokyo – Nikkei 225: UP 5.7% at 62,915.87 (break)
Hong Kong – Hang Seng Index: UP 1.5% at 26,598.50
Shanghai – Composite: UP 0.2% at 4,167.62
West Texas Intermediate: FLAT at $95.08 a barrel
Brent North Sea Crude: UP 0.1% at $101.32 a barrel
Dollar/yen: DOWN at 156.23 yen from 156.39 yen on Wednesday
Euro/dollar: UP at $1.1756 from $1.1752
Pound/dollar: UP at $1.3600 from $1.3594
Euro/pound: DOWN at 86.42 pence from 86.45 pence.