Asian Stocks Mostly Gain as Middle East Tensions Ease; Japan Rallies Amid Political Uncertainty

Asian markets saw a mostly positive start on Monday, driven by easing concerns over the Israel-Iran conflict as Israel’s recent attack on Iran spared critical oil and nuclear infrastructure. Japanese markets led the gains, with the Nikkei 225 and TOPIX indices climbing 1.5% and 1.2%, respectively, as political uncertainty reduced the likelihood of further interest rate hikes from the Bank of Japan.

Japan’s ruling Liberal Democratic Party lost its parliamentary majority, raising speculation that the central bank may hold back on rate increases, which in turn benefited export-focused stocks. Broader Asian markets, including Australia’s ASX 200 and South Korea’s KOSPI, edged higher as investors awaited a week of significant tech earnings and economic data from the U.S.

Chinese markets underperformed, with the CSI 300 and Shanghai Composite indices trading flat as the country anticipates key PMI data and potential impacts from Beijing’s recent stimulus initiatives.