Shares scale new peaks as markets eye shaky US-Iran truce

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TOKYO, May 27 : Asian shares climbed to record highs while oil prices remained elevated on Wednesday, as markets looked for signals that a shaky truce between the United States and Iran will be extended.

The dollar held gains from the previous session after Iran said the U.S. had violated a ceasefire. New Zealand's dollar rose after the central bank kept its policy rate unchanged but signalled future hikes will need to come sooner.

Japanese and South Korean shares scaled fresh peaks after major U.S. stock markets reopened from a holiday to rise to all-time highs on AI optimism. Sentiment remains vulnerable, however, as talks continue to reach a lasting halt to the three-month-long conflict that has rocked energy markets, and central banker comments will be watched for how the crisis is affecting the outlook for inflation and interest rates.

"The markets are just waiting for something tangible now when it comes to a deal between the U.S. and Iran," Kyle Rodda, senior financial market analyst at Capital.com, wrote in a note.

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"A lot of good news is priced in, leaving room for disappointment if something comprehensive isn't announced."

MSCI's broadest index of Asia-Pacific shares outside Japan advanced for a fifth straight session, rising 1.9 per cent to an all-time high. Japan's Nikkei jumped 1 per cent, briefly trading above the 66,000 mark for the first time.

South Korea's KOSPI soared 4.3 per cent, extending gains after Samsung Electronics' unionised workers voted to approve a tentative wage deal averting a strike that threatened to rattle global chip supplies.

In early European trades, the pan-region Euro Stoxx 50 futures were up 0.18 per cent, German DAX futures rose 0.1 per cent, and FTSE futures slipped 0.1 per cent. U.S. stock futures, the S&P 500 e-minis, edged up 0.09 per cent.

In currency markets, the dollar index, which measures the greenback against a basket of currencies, rose 0.01 per cent to 99.11 after a 0.15 per cent gain in the prior session. The euro rose 0.07 per cent to $1.1636, and the yen was little changed at 159.28 per dollar.

Iran's foreign ministry said U.S. strikes in the southern Hormozgan province represented a "gross violation" of a ceasefire. The U.S. said its attacks were defensive in nature.

U.S. Secretary of State Marco Rubio said a deal with Tehran to halt the conflict could "take a few days," while Iran's Tasnim news agency reported that Tehran was seeking the release of $24 billion in funds frozen overseas.

U.S. crude fell 1.24 per cent to $92.73 a barrel, and Brent slipped to $98.70 per barrel, down 0.88 per cent on the day, after a nearly 4 per cent surge in the prior session.

The Reserve Bank of New Zealand held interest rates steady at 2.25 per cent in a split board decision that emphasised the need for rates to move up sooner. The kiwi strengthened 0.58 per cent versus the greenback to $0.587.

In Australia, data showed consumer prices increased by less than expected in April while core inflation ticked up. The Aussie weakened 0.1 per cent to $0.716.

At a meeting of central bankers in Tokyo, Bank of Japan Governor Kazuo Ueda cautioned that a temporary energy shock can become persistent if it feeds into wages and price-setting behaviour. European Central Bank board member Isabel Schnabel on Tuesday advocated for an interest rate hike in June even if a U.S.-Iran peace deal is reached.

Spot gold fell 0.07 per cent to $4,502.72 an ounce, while copper rose 0.52 per cent to $13,695.00 a metric ton. 

In cryptocurrencies, bitcoin fell 0.40 per cent to $75,711.92, and ether declined 0.26 per cent to $2,070.46.

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