A wave of cautious optimism swept through Asian equities on Friday after US President Donald Trump declared that a deal to end the American military campaign against Iran could be signed within days. His announcement, posted on social media, sent Tokyo’s Nikkei 225 soaring by more than 3.5 percent and South Korea’s Kospi index rocketing 7.8 percent higher, as investors bet on an easing of geopolitical tensions that have roiled energy markets and disrupted supply chains across the region.

The rally in Asia followed a strong session on Wall Street, where the S&P 500 and Nasdaq jumped on Thursday as oil prices tumbled. Brent crude futures fell sharply, unwinding the risk premium built up during weeks of escalating hostilities. In Tokyo, the Nikkei briefly surged over 2,800 points, touching an intraday high of 67,065.94, before settling at 66,442.95 at the morning break. The moves signalled a collective sigh of relief in markets heavily dependent on Middle Eastern energy imports, with Japan and South Korea particularly exposed to any disruption in the Strait of Hormuz.

Viewed from Tehran, however, the path to peace appeared far less certain. Foreign ministry spokesman Esmaeil Baqaei pushed back against Trump’s claim that talks had been “brought to the highest level of Iranian leadership and approved,” insisting that the Islamic Republic had “not reached a final conclusion on the agreement.” The contradiction injected a note of caution into the rally, with analysts in London warning that the gap between Trump’s upbeat messaging and Iran’s procedural ambiguity could swiftly reverse market gains if negotiations stall.

For Seoul and Tokyo, the stakes are immense. Both economies rely overwhelmingly on seaborne crude shipments, and a prolonged conflict would force a painful repricing of energy costs. Friday’s surge, while dramatic, left benchmarks still well below their pre-crisis peaks, reflecting lingering doubt. Market observers noted that the outsized move in the Kospi—nearly double the Nikkei’s gain—suggested short-covering by funds that had hedged aggressively against worst-case scenarios.

The coming days will test whether Trump’s optimism proves well-founded. A formal deal would likely unleash further rotation from safe havens into risk assets, strengthening Asian currencies and easing pressure on central banks. Conversely, any sign that Tehran is unwilling to endorse the agreement could spark a rapid unwinding of Friday’s gains. For now, markets are choosing to price in the best possible outcome, but the gap between Washington’s narrative and Iran’s official line remains the central risk to this fragile rally.