Following a broad, tech-driven rally on U.S. Wall Street overnight, most major Asian equity benchmarks kicked off Friday morning trading in positive territory, lifting regional investor sentiment across global markets.
Japan’s benchmark Nikkei 225 climbed 0.6% to 64,622.33 in early morning trading, while South Korea’s Kospi notched a steeper 0.9% gain to reach 6,635.67. Hong Kong’s Hang Seng Index outperformed regional peers, jumping 2.1% to 25,751.26, and China’s Shanghai Composite Index added a solid 0.8% to end the morning session at 3,973.27. Australia’s S&P/ASX 200 bucked the regional upward trend, dipping less than 0.1% to 9,011.80 in a muted performance.
The upward momentum spilled into Asian markets after all three major U.S. indexes closed higher on Thursday, driven by cooling 10-year Treasury bond yields and sharp gains for large-cap technology and communication services stocks. High valuations for these sectors give them outsize influence on overall market direction, and their rally pulled broad indexes higher across the board: the S&P 500 gained 1.1%, the Dow Jones Industrial Average rose 1.2%, and the tech-heavy Nasdaq Composite climbed 1.4% by closing bell.
Leading major tech names all posted solid gains. Microsoft rose 2.7%, Apple gained 1%, and Meta Platforms climbed 3%. Leading AI chipmaker Nvidia, whose high-performance processors remain the foundational hardware for cutting-edge artificial intelligence development, added 1.8% following confirmation of its planned $13 billion acquisition of AI platform Hugging Face. The deal will leave Hugging Face’s open-source platform model intact, according to reporting on the transaction. Communication services stocks also contributed heavily to the U.S. rally, extending the upward momentum driven by AI-focused growth expectations.
In energy markets, crude oil prices extended recent gains amid ongoing geopolitical tensions between the U.S. and Iran, which have entered a sixth month of open conflict that has intensified in recent weeks. Benchmark U.S. crude rose 65 cents to $91.95 per barrel, while international benchmark Brent crude climbed 47 cents to $95.95 per barrel. The ongoing conflict is widely cited as the core driver of recent energy price surges, as most global oil shipments from the Middle East pass through the Strait of Hormuz – a chokepoint critical to energy supplies for nations across the globe, including Japan, which imports nearly 100% of its crude oil demand. Tensions escalated further Thursday after Iran fired on Kuwait in retaliation for U.S. bombardments earlier that week, adding to supply uncertainty for global energy markets.
Bond markets saw continued easing of yields that have climbed steadily throughout 2026. The yield on the 10-year Treasury note, which is a key benchmark for mortgage rates and consumer lending across the U.S., fell to 4.77% from 4.79% at the close of Wednesday’s session. At the start of 2026, the 10-year yield sat at just 4.20%, reflecting steady upward movement through the year that has put pressure on equity valuations.
Shifting expectations around U.S. Federal Reserve interest rate policy also supported market gains this week. Many investors now interpret recent comments from Federal Reserve Governor Christopher Waller as a signal that the central bank is less likely to raise its benchmark short-term interest rate at its upcoming policy meeting in two weeks than previously projected. Waller noted that if next week’s incoming inflation data shows cooling price growth, he would support holding interest rates steady at the next meeting, while a hotter-than-expected inflation reading would lead him to back a rate hike.
Market participants are also closely watching the Bank of Japan, which will hold its next policy board meeting later this month. Many analysts expect the central bank to raise its benchmark interest rate, but uncertainty remains over the size of the potential increase. Japan has faced growing market pressure to raise rates to lift the value of the yen against the U.S. dollar, which has traded near multi-decade lows in recent sessions. In Friday currency trading, the U.S. dollar edged only slightly lower against the yen, falling from 155.84 yen to 155.78 yen. The euro held largely steady against the U.S. dollar, trading at $1.1633 compared to $1.1631 in the previous session.