(Sharecast News) - Asia-Pacific markets were mixed on Friday as investors remained cautious despite a three-week extension of the Israel-Lebanon ceasefire, with lingering geopolitical risks and higher oil prices weighing on sentiment.
US stocks had pulled back after touching fresh intraday highs, adding to the uneven tone across the region.
Patrick Munnelly, market strategy partner at TickMill, said oil remained a central driver of sentiment.
"Oil continues to play a significant role in the macroeconomic landscape this morning," he commented.
"Brent is pressing toward $106 per barrel, up for a fifth straight session and now roughly 74% year-to-date, as the lack of progress in US-Iran de-escalation keeps the Strait of Hormuz effectively shut and forces the market to price a more durable supply shock."
Israel and Lebanon agreed to extend their ceasefire by three weeks after a meeting at the White House with senior US officials, president Donald Trump said on Thursday.
"The Meeting went very well!" Trump said in a Truth Social post announcing the extension.
The temporary truce, originally due to expire after 10 days, would now allow more time for diplomatic efforts, while Washington also pledged to work with Lebanon to strengthen its defences against Hezbollah.
Munnelly said the market backdrop was shifting as energy risks became more entrenched.
"The cross-asset response is becoming cleaner: 10-year US Treasury yields and the broad dollar are both tracking their first weekly gains in a month, while MSCI ACWI is headed for its first weekly decline since April.
"The market is moving from a 'hopeful pause' to a 'persistent disruption',, and if Hormuz remains constrained, the energy impulse will increasingly dominate the rate-FX-equity conversation."
Tokyo rises on mixed day for region
Japan led regional gains, with the Nikkei 225 rising 0.97% to 59,716.18, helped by strong moves in Ibiden, up 12.62%, Denka, up 8.33%, and Advantest, up 5.52%.
The broader Topix was little changed, edging up 0.01% to 3,716.59.
Japan's annual inflation rose to 1.5% in March from 1.3% in February, while core inflation increased to 1.8% from 1.6%, remaining below the central bank's 2% target for a second month.
Transport costs rose 2.1%, the fastest pace in four months, amid Middle East tensions, while food prices increased 3.6%, slowing from 4.0% a month earlier.
On a monthly basis, the consumer price index rose 0.4%, reversing a previous decline and reaching its highest level since January 2025.
Chinese markets weakened, with the Shanghai Composite down 0.33% at 4,079.90 and the Shenzhen Component falling 0.69% to 14,940.30.
Zhejiang Great Shengda Packaging dropped 10.02%, Ningbo Shenglong Automotive Powertrain System fell 10.01%, and Hunan Baili Engineering Sci & Tech lost 10%.
Hong Kong's Hang Seng Index moved in the opposite direction, rising 0.24% to 25,978.07, supported by a 10.01% gain for SMIC, a 4.26% rise for Xinyi Glass Holdings and a 3.37% advance for Innovent Biologics.
South Korea's Kospi 100 fell 0.54% to 7,458.74, dragged lower by Korea Aerospace, down 6.08%, Samsung SDS, down 4.82%, and Hyundai Mobis, down 4.52%.
Stocks fall down under
In Australia, the S&P/ASX 200 slipped 0.08% to 8,786.50, as IGO tumbled 17.92%, EVT fell 7.25%, and Contact Energy lost 6.01%.
Across the Tasman Sea, New Zealand's S&P/NZX 50 also declined 0.08%, closing at 12,874.94, with Stride Property down 1.72%, Scales Corporation off 1.48%, and Tourism Holdings 1.43% lower.
Dollar marginally weaker as oil prices rise
In currencies, the dollar was little changed against major Asia-Pacific peers.
It slipped 0.01% on the yen to trade at JPY 159.69, as it fell 0.06% against the Aussie to AUD 1.4019, and declined 0.08% on the Kiwi to change hands at NZD 1.7069.
Oil prices rose as geopolitical uncertainty persisted, with Brent crude futures last up 1.98% on ICE at $107.15 per barrel, and the NYMEX quote for West Texas Intermediate gaining 1.64% to $97.42.
Reporting by Josh White for Sharecast.com.
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