Asian stocks rally as Trump hints at short Iran campaign

Global markets staged a relief rally on Thursday as President Donald Trump suggested the latest round of US attacks against Iran would likely be short-lived, pulling oil prices back from recent highs and easing a surge in bond yields that had rattled investors at the start of September.

Asked on Wednesday how long the bombing campaign could last, Trump told reporters: "I don't think too long."finance.yahoo+1

The remark came after US strikes on Iranian targets in the Strait of Hormuz — a crucial transit point for a fifth of global oil and gas — sparked tit-for-tat exchanges that sent crude rallying as much as 10 percent earlier in the week and fueled fears of a further jump in already-elevated inflation.bssnews+1

Markets Breathe Easier

Brent crude and West Texas Intermediate both edged lower on Thursday, paring gains from the week's earlier spike. Yields on 10-year US Treasuries fell after a global bond sell-off had pushed them to multi-year highs, with the 10-year dropping to 4.77 percent from above 4.81 percent.thehansindia+1

Asian stocks broadly advanced. Tokyo's Nikkei 225 rose 0.2 percent, South Korea's Kospi climbed 1.4 percent, and Hong Kong's Hang Seng and the Shanghai Composite also gained. All three major US indexes had closed higher on Wednesday, with the Dow Jones Industrial Average up 0.6 percent.finance.yahoo+1

"Treasury yields eased, and stocks could finally breathe," wrote Stephen Innes at Quintex Intel. "The market is not suddenly celebrating weaker growth. It is simply rediscovering that slightly bad news may be exactly what it needs right now, especially if the alternative is a Fed that feels compelled to keep tightening into an oil shock."bssnews+1

Weak Jobs Data Adds to Relief

Softer-than-expected US economic data reinforced the calmer mood. August private payrolls came in below forecasts, easing pressure on the Federal Reserve to raise interest rates at its September 16 meeting. New York Fed President John Williams told CNBC there is evidence inflation continues to ease as the impact of tariffs fades, though higher energy prices have yet to spill over into services.tradingview+1

Attention now turns to Friday's non-farm payrolls report and next week's consumer price index, both of which could weigh heavily on the Fed's next move.finance.yahoo+1

Yen Intervention Speculation Grows

The Japanese yen also drew close attention after strengthening sharply to 158.22 per dollar on Wednesday, having traded above 160 earlier in the day. A Bank of Japan board member raised the possibility of outsized or back-to-back rate hikes at the central bank's September 18 meeting, and observers said it appeared authorities had again intervened to support the currency.fxempire+2

Still, skepticism lingered over the durability of the market calm. "This is the same President who said the conflict would be four weeks, which is now in its sixth month," noted FX Empire's analysis. "The geopolitical pot is still simmering."bssnews+1