(Sharecast News) - Asia-Pacific markets were mostly closed for the May Day holiday on Friday, but shares in Australia, Japan and New Zealand rose as investors tracked gains on Wall Street and looked past renewed fears of escalation in the Iran war.
"US equity futures are extending the post-earnings rally, with S&P 500 and Nasdaq 100 futures up 0.2% after both indices printed fresh all-time highs on Thursday," said Patrick Munnelly, market strategy partner at TickMill.
"The market is still leaning into the idea that megacap tech can outrun the macro drag, helped by robust earnings and AI capex/investment momentum."
Markets in Australia and Japan mirrored overnight gains in the US, where the S&P 500 and Nasdaq Composite reached new highs as investors took in strong earnings from Apple and Caterpillar.
The rally came despite weaker-than-expected US economic data and fresh threats of escalation in Iran by president Donald Trump.
The US Commerce Department said on Thursday that gross domestic product rose at a 2.0% annualised pace in the first quarter, up from 0.5% in the fourth quarter of 2025 but below the 2.2% consensus estimate from Wall Street economists.
"Apple is firmer after-hours on an upbeat revenue outlook and another large buyback, despite flagging higher memory-chip costs," Munnelly said.
"April was violent under the surface - oil shock, Middle East escalation, and inflation repricing - but US equities still delivered their best month since 2020 as AI-led tech leadership overwhelmed the macro-noise."
Oil prices remained elevated after Brent crude briefly surged to $126 a barrel on Thursday following an Axios report that the US military would brief Trump on potential action against Iran.
Brent crude futures were last up 0.88% on ICE at $111.37 per barrel, while the NYMEX quote for West Texas Intermediate gained 0.27% to $105.35.
Tokyo closes higher on quiet day for region
In Japan, the Nikkei 225 rose 0.38% to 59,513.12, while the broader Topix edged up 0.04% to 3,728.73.
Toto jumped 18.43%, Sumitomo Corporation gained 17.12%, and Toyota Tsusho advanced 12.57%.
The yen strengthened marginally against the dollar after reports that Tokyo had intervened to support the currency on Thursday, prompting a sharp rally.
The dollar was last down 0.01% on the yen at JPY 156.58.
"Japan's FX intervention was unusually aggressive and deliberately pre-emptive," Munnelly said.
"The usual script was only partly followed: Katayama and Mimura escalated the verbal warning cycle, flagged speculative moves, and emphasised close communication with the US - effectively signalling political cover to act - but the actual intervention came even after USD-JPY had already fallen from above 160.50 to around 159.20, a move that would normally have satisfied officials."
Munnelly said the "estimated $60bn to $80bn yen-buying operation was far larger than the $35bn to $40bn daily clips seen in 2022-2024 and closer in scale to 2011-style operations," suggesting Japan's Ministry of Finance had tried to get ahead of thin Golden Week liquidity, yen-negative month-end flows and the risk of a break above prior highs triggering further dollar demand.
"Tactically, the move was smart: verbal intervention now has more credibility, and the MoF likely bought itself time," he said.
"Strategically, however, the yen's problem remains unresolved - BoJ policy is still too easy versus increasingly neutral/hawkish peers, fiscal policy is turning more expansionary, inflation is accelerating, and Japan's REER is at its weakest since 1970.
"Intervention can slow the move, but it cannot fully offset the structural pressure on the yen."
Markets in China, Hong Kong and South Korea were closed for the Labour Day holiday.
South Korea's exports nevertheless extended their surge in April, with the value of shipments adjusted for differences in working days rising 48% from a year earlier, according to the trade ministry.
Unadjusted exports also climbed 48%, compared with a revised 49.2% gain for March, while imports increased 16.7%, leaving a trade surplus of $23.8bn.
Semiconductors remained the main driver of South Korea's export growth, with shipments of $31.9 billion, up 173% from a year earlier and following March's record $32.8bn, as investment in artificial intelligence and data centres continued to support demand.
Fuel exports also contributed, reflecting higher crude prices.
Exports to the US rose 54%, while shipments to China increased 62.5%.
South Korea's economy grew 1.7% in the first quarter, its fastest pace in more than five years, reversing a contraction at the end of 2025.
Sydney and Wellington manage gains too
Turning down under, Australia's S&P/ASX 200 rose 0.74% to 8,729.80.
Liontown Resources climbed 12.34%, IperionX gained 9.76%, and Guzman Y Gomez added 5.19%.
Australia's final demand producer price index rose 0.4% quarter-on-quarter in the first quarter of 2026, down from 0.8% in the prior quarter and below expectations for 0.9%.
It marked the 23rd consecutive quarter of producer inflation, but was the slowest pace since the first quarter of 2021.
On an annual basis, producer prices rose 3.0%, slowing from 3.5% in the fourth quarter and marking the softest rate since the third quarter of 2021.
The S&P Global Australia manufacturing PMI rose to 51.3 in April from March's 49.8 and above flash data of 51.0, although the improvement was mainly linked to longer delivery times caused by the Middle East war and international freight delays.
Across the Tasman Sea, New Zealand's S&P/NZX 50 rose 1.05% to 13,039.20, with Fletcher Building up 3.94%, Goodman Property Trust gaining 3.7%, and Mainfreight adding 3.39%.
In currencies, the dollar was last up 0.17% on the Aussie to trade at AUD 1.3910, as it gained 0.25% against the Kiwi to change hands at NZD 1.6968.
Reporting by Josh White for Sharecast.com.
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