Asian Stocks Hit Record Highs on Hopes for US-Iran Ceasefire Extension

Key Facts

1Japan's Nikkei 225 Index jumped 2.85% to reach a record high of 65,110 yen.

2Market participants predicted that the US and Iran will extend the ceasefire by 60 days.

3South Korea's Kospi Index rose to 7,847, trading just below its all-time high of 8,048.

Asian equity markets surged at the start of the week, with Japan's Nikkei 225 Index jumping 2.85% to reach a fresh record high of 65,110 yen. This rally is primarily driven by market optimism regarding a potential 60-day extension of the ceasefire between the United States and Iran. Similarly, South Korea's Kospi Index climbed to 7,847 points, trading just below its all-time high of 8,048, as geopolitical tensions showed signs of easing.

The de-escalation in US-Iran relations has significantly boosted risk-on sentiment, leading to a reduction in geopolitical risk premiums across global markets. According to market data, this regional strength coincides with stable monetary conditions in China, where the 1-year Loan Prime Rate remained at 3% and the 5-year rate at 3.5% as of May 20, 2026. Experts suggest that reduced energy supply risks and a stabilizing Middle East backdrop are providing a strong tailwind for Asian export-heavy economies.

Investors should watch for consolidation at these elevated levels, with the Nikkei 225 at 65,110 yen (close May 25, 2026). Key catalysts ahead include official diplomatic confirmations regarding the ceasefire and upcoming global inflation data which will dictate broader market liquidity. The proximity of the Kospi to its 8,048 all-time high remains a critical technical level for regional sentiment in the coming sessions.