Iran-US Truce Drives Asia Risk-On; Data Takes Backseat

Asian markets opened sharply higher Friday after President Trump announced a truce with Iran, sending oil prices lower and lifting equities across the region.

The Nikkei 225 rose 2.1% in early trade. Australia's ASX 200 added 1.4%. Hong Kong futures pointed to a 1.8% open. The moves extended a global rally that began late Thursday after Trump said the two sides had agreed to halt hostilities, without providing details on the terms.

Brent crude fell 3.2% to $71.40 a barrel, extending a slide that began after the announcement. The drop reflected relief that a broader Middle East conflict – one that could have disrupted shipping through the Strait of Hormuz – had been averted, traders said.

The economic calendar for the Asian session is thin. Japan releases May producer prices at 8:50 a.m. Tokyo time, with consensus calling for a 2.3% year-on-year gain, unchanged from April. Australia has no major data due. China markets are closed for a public holiday.

"The data won't move anything today," said a Sydney-based trader at a Japanese bank. "The only question is whether the truce holds and what the details look like. Until we get clarity, risk-on is the default."

The yen weakened against the dollar, with USD/JPY rising to 142.80 from 141.90 late Thursday. The Australian dollar gained 0.6% to $0.6720. The New Zealand dollar rose 0.5% to $0.6180.

Gold slipped 1.1% to $2,310 an ounce as safe-haven demand faded. The yield on 10-year U.S. Treasuries rose 4 basis points to 4.32% in Asian trading, reflecting the shift away from havens.

Investors are watching for any signs that the truce could unravel. Iran's foreign ministry said it would release a statement later Friday. The White House said Secretary of State Marco Rubio would brief reporters at 2 p.m. Washington time.

"The market is pricing in a best-case scenario," said the trader. "Any sign of a breakdown and you'll see a sharp reversal."