Asian Markets Rally on Easing Oil Prices and Hawkish Fed

Asian stock markets traded mostly higher on Friday, reflecting overnight gains on Wall Street. The market sentiment improved as easing crude oil prices and softer U.S. Treasury yields offset hawkish signals from the Federal Reserve. The Fed raised interest rates by 25 basis points to a target range of 3.75%-4.00%, leaving the door open for another rate hike later this year.

In commodities, crude oil eased toward $101 per barrel, while spot gold advanced toward $4,400 per ounce. In Japan, South Korea's KOSPI jumped 2.39% to around 6,850, recovering losses from the previous session. The Bank of Japan raised its key short-term interest rate by 25 basis points to 1.25%, its highest level since April 1995.

The gains followed the BOJ's decision, which was a 7-2 vote. On the economic data front, Japan's headline annual inflation rate held steady at 1.9% in August 2026, while food price growth slowed to 3.1% year-on-year, its softest pace since July 2024.