(Sharecast News) - Asia-Pacific markets were mostly lower on Friday as investors assessed the durability of a US-brokered peace agreement with Iran and signs that shipping activity through the Strait of Hormuz was recovering.
"The relief rally is catching its breath, and holiday-thin markets are amplifying hesitation," said Patrick Munnelly, market strategy partner at TickMill.
"Lower oil and reopened Hormuz shipping lanes remain powerful tailwinds, and the AI-driven equity bid shows no sign of fading, especially across Asia."
US vice-president JD Vance on Thursday defended president Donald Trump's interim agreement with Iran, saying any economic relief for Tehran would depend on compliance with the terms of the deal.
"The United States isn't giving up a cent of money to Iran," Vance said.
"The only way the Iranians get any of these resources ... is if they comply fully."
Iran's Supreme Leader, Ayatollah Mojtaba Khamenei, also described the agreement as conditional, saying on Thursday that he approved the memorandum only after receiving guarantees that Iran's rights and the "resistance front" would be safeguarded.
Munnelly said global markets were ending the week with a more cautious tone as investors reassessed how much of the US-Iran de-escalation story was already priced.
"The pullback looks more like a pause than a reversal," he said.
"The US-Iran interim agreement has materially reduced the left-tail risk of a prolonged energy supply shock, and shipping through the Strait of Hormuz is beginning to resume."
Munnelly said three Saudi-flagged crude tankers had reportedly passed through the Strait, giving markets tangible evidence that the political breakthrough was starting to translate into operational improvement.
"But the 60-day diplomatic window now becomes the next test," he added.
"A temporary reopening is not the same as a durable nuclear deal or a lasting peace settlement."
Oil prices were mixed in choppy trade as markets assessed the implications of the deal.
Brent crude futures were last down 0.5% on ICE at $79.45 per barrel, while the NYMEX quote for West Texas Intermediate rose 0.72% to $77.15.
Tokyo benchmark rises on mixed day for region
Japan's Nikkei 225 rose 0.28% to 71,250.06, although the broader Topix fell 0.57% to 4,044.96.
Fujikura jumped 15.69%, Furukawa Electric gained 15.1%, and Kioxia Holdings added 12.07%.
Japan's core inflation rate held steady at 1.4% in May, matching expectations and suggesting underlying price pressures remained contained despite concerns that higher energy costs could push inflation higher.
The measure, which excludes fresh food prices, was unchanged from April and in line with the 1.4% expected by economists polled by Reuters.
Headline inflation edged up to 1.5% from 1.4%, while core-core inflation, which excludes fresh food and energy, eased to 1.8% from 1.9%.
Markets in mainland China and Hong Kong were closed for the Dragon Boat Festival holiday.
South Korea's Kospi 100 edged up 0.26% to 11,472.60.
NCsoft rose 7.16%, LS Industrial Systems gained 7.02%, and Samsung SDI added 6.32%.
Munnelly said Asia remained the strongest expression of the equity rally, particularly through technology.
"Japan and South Korea extended gains earlier in the session before losing momentum," he said.
"The Nikkei is still on course for a weekly gain of around 7.6%, while the Kospi has surged roughly 11%."
"The chip sector has been the main transmission channel from peace optimism to equity upside," he added.
"Lower oil, reduced geopolitical uncertainty and the AI theme have combined to create a powerful bid for semiconductor-linked markets."
Sydney falls, Wellington in the green as trade surplus narrows
Heading down under, Australia's S&P/ASX 200 fell 0.92% to 8,828.70.
Alcoa dropped 6.88%, Newmont Corporation lost 6.66%, and Hub24 declined 6.58%.
Across the Tasman Sea, New Zealand's S&P/NZX 50 rose 0.99% to 13,495.63.
SkyCity Entertainment Group jumped 11.65%, A2 Milk Company gained 8.42%, and Air New Zealand added 7.95%.
New Zealand's trade surplus narrowed to NZD 0.8bn in May from NZD 1.1bn a year earlier, slightly below expectations for NZD 0.875bn, as imports rose faster than exports.
Exports increased 18.1% year on year to a record NZD 8.9bn, while imports jumped 25.9% to a record NZD 8.1bn.
Dollar mixed against regional peers
In currencies, the dollar was last down 0.07% on the yen to trade at JPY 161.27 as it slipped 0.05% against the Aussie to AUD 1.4251, while it rose 0.19% on the Kiwi to change hands at NZD 1.7411.
Reporting by Josh White for Sharecast.com.
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