Asian stocks ended mixed on Thursday, with Japanese and South Korean markets reaching fresh records on signs of easing geopolitical tensions and investor enthusiasm for artificial intelligence.
A cautious undertone prevailed elsewhere across the region after the U.S. Federal Reserve hinted at a possible interest rate hike this year.
The dollar rallied in Asian trade on the back of hawkish Fed bets and upbeat retail sales and housing data released overnight.
Gold traded nearly 1% higher below $4,300 an ounce while Brent crude futures fell almost 2% toward $78 a barrel.
China's Shanghai Composite index dropped 0.43% to 4,090.48 on worries about possible rate hikes in the US. Hong Kong's Hang Seng index tumbled 1.59% to 23,924.81, extending losses for a third consecutive session.
Japanese markets rallied after reports emerged that the U.S.-Iran peace agreement has been finalized and digitally signed by U.S. President Donald Trump and Iranian President Masoud Pezeshkian.
Both countries released the text of the agreement, which seeks to extend a ceasefire announced in April by another 60 days to allow room for negotiations.
The Nikkei average soared 1.65% to 71,053.49, rising above 71,000 for the first time and extending its record-breaking run to a fourth session.
The broader Topix index settled 1.37% higher at 4,068.18. Artificial intelligence and semiconductor-related stocks topped the gainers list, reflecting overnight gains in the U.S. SOX Philadelphia semiconductor index.
Seoul stocks reached a new peak as chipmakers hit record highs on AI optimism. The Kospi index jumped 2.25% to 9,063.84, breaching the 9,000 milestone for the first time. Market bellwether Samsung Electronics surged 4.6% and SK Hynix advanced 6.5%.
Australian markets fell notably to snap a four-day winning streak. The benchmark S&P/ASX 200 dropped 0.62% to 8,911.10, after having hit a two-month high in the previous session. The broader All Ordinaries index closed 0.64% lower at 9,126.80.
Across the Tasman, New Zealand's benchmark S&P/NZX-50 index slipped 0.22% to 13,363.31, extending losses from the previous session despite Q1 GDP data matching expectations.
Overnight, US.stocks tumbled while Treasury yields climbed as the Federal Reserve left interest rates unchanged as widely expected, but the latest set of projections suggested there could be at least one increase to its main rate this year.
After removing "forward guidance" from the policy statement, Kevin Warsh said in his first press conference as Fed Chair that it was no longer useful and that he would consider a revamp of how the Fed communicates with financial markets and US households and businesses.
He asked investors to react to incoming reports on inflation, the job market and other economic indicators rather than trying to predict the Fed's next move. He also chose not to submit the famous "dot plot," saying it's not helpful in the conduct of policy.
Earlier in the day, data showed retail sales increased more than expected in May. Pending home sales grew 4.8% in the month, signalling stronger housing demand.
The tech-heavy Nasdaq Composite lost 1.3%, the S&P 500 declined 1.2% and the Dow dipped 1%.
