Japanese stocks surged by 5% to a new high on Thursday morning, driven by optimism surrounding potential progress in diplomatic talks between the United States and Iran to end their ongoing conflict. The Tokyo market, reopening after the Golden Week holidays, saw accelerated buying momentum as investors responded positively to signals from US officials, including President Trump, who expressed optimism about reaching an agreement with Iran. The yen also strengthened amid concerns about possible government intervention to curb its recent weakness, further contributing to positive sentiment in the market [1].
Meanwhile, the NZD/USD currency pair traded in positive territory around 0.5960 during Asian trading hours, with the New Zealand Dollar gaining traction against the US Dollar. This move was attributed to reports that the US and Iran are close to a deal to end the war, with CNN reporting that Iran is expected to hand over its reply to mediators regarding the US proposal on Thursday. President Trump stated that the US has had 'very good talks' with Iran over the past 24 hours. A potential agreement is seen as likely to lift riskier assets, such as the Kiwi, in the near term [2].
Market participants are also awaiting the release of the US jobs report for April, expected later on Friday. Economists forecast a gain of 60,000 jobs and an unemployment rate holding steady at 4.3%. Stronger-than-expected US jobs data could support the US Dollar and pose a headwind for NZD/USD. In New Zealand, the unemployment rate unexpectedly fell to 5.3% in Q1 2026 from 5.4%, maintaining expectations for a near-term rate hike by the Reserve Bank of New Zealand (RBNZ). RBNZ Governor Anna Breman anticipates slightly elevated near-term inflation and slightly slower but still positive growth this year [2].
Traders are closely monitoring further developments in US-Iran negotiations and any signals from Japanese authorities regarding yen stability. The next resistance level for Japanese equities will likely depend on the outcome of these diplomatic efforts and global risk sentiment [1].
CONCLUSION
Both Japanese equities and the NZD/USD pair experienced significant gains on Thursday, fueled by optimism over a potential US-Iran peace deal. The market reaction underscores the importance of geopolitical developments in shaping investor sentiment and risk appetite. Forward-looking statements indicate continued market sensitivity to diplomatic progress and upcoming economic data releases.