<div id="readability-page-1"><div><figure></figure>Asian stocks rose on Wednesday after President Donald Trump said Washington could hold fresh talks with Iran in Pakistan within the next two days, reviving hopes that diplomacy may yet contain the latest confrontation.The shift in tone helped ease pressure across energy markets, with oil extending overnight losses and investors returning to risk assets after a volatile start to the week.The relief move was broad.MSCI’s broadest index of Asia-Pacific shares outside Japan rose 1.5% to a six-week high, while Japan’s Nikkei advanced 1.2%, moving closer to its recent record peak.Chinese blue chips added 0.5% and Hong Kong’s Hang Seng climbed 1.2%, suggesting investors were willing to look beyond the immediate geopolitical shock and focus instead on the possibility of a negotiated outcome.Diplomacy hopes lift sentimentMarkets were encouraged by signs that talks may still go ahead even after Washington imposed a blockade on Iranian ports over the weekend in a worsening dispute over Tehran’s nuclear programme.Pakistani and Iranian officials also indicated that discussions could still take place, helping investors to price in at least the prospect of de-escalation after Monday’s sharp sell-off.“It looks like diplomacy has been given a reprieve and it is positive,” Gaurav Goyal, a market analyst at IIFL Securities, said.“Iran may back off and negotiations could be revived.”That view helped underpin gains across the region, particularly in markets that had been hit hardest by the earlier jump in oil and the risk of a wider conflict.Japanese shares were among the stronger performers, reflecting improved risk sentiment as geopolitical tensions showed signs of easing.The move pushed Tokyo’s benchmark closer to its record high reached earlier this year, underlining how quickly sentiment can improve when markets sense geopolitical tensions may stop short of a deeper disruption.Oil falls and inflation fears easeOil prices, which had surged earlier in the week as traders feared tighter supply and disrupted shipping routes, moved lower as diplomatic hopes returned.US crude fell 0.6% to around $90.6 a barrel, while Brent lost 0.7% to $94.13.The decline followed an almost 5% drop overnight, a sign that traders were unwinding some of the risk premium built into energy markets.That retreat in oil also helped calm concerns about inflation.Investors had spent much of the week worrying that higher fuel costs would feed rapidly into broader prices and complicate the outlook for central banks.A softer-than-expected March producer price reading added to that sense of relief, suggesting pipeline inflation may not be accelerating as quickly as feared.Tony Sycamore, market analyst at IG, said the strength in risk assets reflected a growing willingness among investors to look through the immediate volatility tied to the Middle East.As long as signs of renewed diplomacy continue to emerge, he said, energy prices should ease and the more constructive market mood could continue.Bonds and currencies stay restrainedMoves in bonds and currencies were more measured.The dollar steadied after seven consecutive sessions of losses, trading around 158.9 yen, while the euro was little changed at $1.1791, holding near recent highs.In rates, US Treasury yields dipped as investors maintained some exposure to safer assets even as equities rallied.The yield on the 10-year US Treasury note eased slightly to around 4.24%, while longer-dated yields also edged lower.That suggested some caution remained beneath the surface, with investors not yet prepared to abandon defensive positions entirely.Risks remain in focusFor all the improved tone, the risks have not disappeared.The stand-off between Washington and Tehran continues to threaten key oil export routes, while the International Monetary Fund’s latest downgrade to the global growth outlook offered a reminder that the broader economic backdrop is already fragile.Asian equities took their cue from lower oil prices and renewed diplomacy hopes, but the durability of the rally will depend on whether those signals turn into something more concrete.If talks do go ahead and energy prices continue to retreat, markets may extend their rebound.If not, the latest rise in stocks could prove to be another short-lived burst of relief in an already unsettled quarter.</div></div>

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Asian stocks surged on Wednesday, led by a 1.2% rise in Japan's Nikkei 225, nearing its record peak, following President Trump's announcement of potential talks with Iran. The MSCI Asia-Pacific index rose 1.5%, reflecting improved investor sentiment amid easing oil prices and inflation fears. Despite ongoing geopolitical tensions, analysts suggest that renewed diplomacy could stabilize markets. However, risks remain, including the standoff between Washington and Tehran and a downgraded global growth outlook from the IMF, which may affect the sustainability of this rally.

Nikkei 225 jumps near record as Asian Markets rally on Iran talk hopes