Tokyo record leads Asia stocks higher as Iran peace hopes grow

Japanese stocks hit a record high as Asian equities extended the week's rally on Thursday on heightened optimism that the United States and Iran will extend their ceasefire for further talks to end their war and reopen the Strait of Hormuz.



The gains tracked Wall Street, which also saw all-time peaks as investors also cheered by healthy earnings that indicated the US economy remained resilient despite surging oil prices and rising inflation.



With the Middle East crisis approaching its seventh week, officials from Washington and Tehran were said to be set for a second round of peace talks in Islamabad.



However, that came as Iran also threatened to shut down the Red Sea, along with the Gulf and Sea of Oman, unless the US lifted a naval blockade of its ports put in place by President Donald Trump following the failure of negotiations last weekend.



White House Press Secretary Karoline Leavitt told reporters further talks "would very likely" be in the Pakistani capital. adding that "we feel good about the prospects of a deal".



US Vice President JD Vance, who led the first round of talks, said Iran is being offered a "grand bargain" to end the conflict.