Asia markets rally as Japan inflation cools

May 22, 2026 (MLN): Asian markets advanced on Friday as investors monitored renewed diplomatic engagement between the United States and Iran aimed at easing tensions in the Middle East, while softer inflation data from Japan added to positive sentiment across the region.

Reports indicating that Tehran plans to retain its enriched uranium reserves domestically have introduced fresh complexity into negotiations with Washington.

U.S. President Donald Trump has continued to push for the dismantling of Iran’s nuclear capabilities as a key objective tied to recent military pressure on Tehran, according to CNBC.

In Japan, the benchmark Nikkei 225 climbed 1.36%, while the broader TOPIX gained 0.55%. Investor sentiment was supported after Japan’s core inflation slowed more than expected in April, easing concerns over an imminent interest rate hike by the Bank of Japan.

Core consumer inflation, which excludes fresh food prices, eased to 1.4% in April from 1.8% in March, coming in below market expectations of 1.7% and marking the lowest reading since March 2022.

South Korean equities also moved higher, with the KOSPI rising 0.59%, while the tech-heavy KOSDAQ surged more than 5%.

In Australia, the S&P/ASX 200 advanced 0.55%. Chinese and Hong Kong equities followed the regional uptrend, with Hong Kong’s Hang Seng Index gaining 1.22% and mainland China’s CSI 300 adding 0.70%.

Oil prices rebounded during Asian trading after declining in the previous session. Brent crude futures rose 1.46% to $104.08 per barrel, while U.S. West Texas Intermediate crude futures gained 0.93% to $97.25 per barrel.

Meanwhile, U.S. Treasury yields edged lower after retreating from recent highs. The benchmark 10-year Treasury yield slipped over one basis point to 4.57%, while the 30-year bond yield declined two basis points to 5.09%.

Overnight on Wall Street, U.S. equities ended higher, with the Dow Jones Industrial Average closing at a record high after gaining 276 points, or 0.55%, to settle at 50,285.66. The S&P 500 added 0.17%, while the Nasdaq Composite edged up 0.09%.

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