South Korea’s Kospi climbs as Asian stocks, bonds gain; oil extends decline

Published Fri, Sep 18, 2026 · 10:01 AM

ASIAN stocks and bonds rose tracking a rally on Wall Street as a pullback in oil prices eased inflation concerns. The yen was mostly steady ahead of the Bank of Japan’s (BOJ) interest rate decision, with traders expecting a hike.

MSCI’s regional equities gauge advanced 0.3 per cent with South Korea’s Kospi index leading gains. That came after the S&P 500 Index rose 1.1 per cent on Thursday (Sep 17), its biggest advance since early August.

Among the main moves in markets, S&P 500 futures were little changed as at 9.07 am Tokyo time. Hang Seng futures rose 0.4 per cent, Japan’s Topix was little changed and Australia’s S&P/ASX 200 rose 0.4 per cent.

The tech-heavy Nasdaq 100 Index climbed 1.7 per cent, while a key gauge of chipmakers jumped 3.1 per cent as US stocks rebounded from losses triggered by the US Federal Reserve’s first rate hike since 2023.

Adding to the positive tone, Brent crude declined for a third day on Friday to just below US$104.00 a barrel as supply concerns eased and traders turned to the next round of diplomacy that could shape the US-Iran war. 

Oil’s retreat helped Treasuries rally across the curve in the New York session, with the 10-year yield falling nine basis points to 4.93 per cent, having touched 5.02 per cent on Wednesday following the Fed move.

Government bonds of similar tenor in Australia and New Zealand opened higher.

Lower energy prices could reduce pressure on consumer prices and give central banks more room to assess the impact of tighter monetary policy, offering support to both stocks and bonds.

But the durability of that reprieve may depend on whether oil continues to retreat, with the US-Iran war and prospects for further diplomacy keeping the outlook for energy supplies uncertain.

SEE ALSO

“Sentiment has been lifted in part because crude oil has fallen for a second day, easing pressure on bond yields,” said Fawad Razaqzada at Forex.com.

Oil fell with Saudi Arabia seeking to restore about half the capacity of its key East-West pipeline within days after it was shut last week following drone strikes, easing some concerns over further supply losses stemming from the Iran conflict. 

Meanwhile, Reuters reported that China asked Iran to help rein in Yemen’s Teheran-backed Houthi militants, a move that could potentially ease disruptions around the Bab el-Mandeb, another strait vital to global shipping and energy markets.

Elsewhere, gold jumped on Thursday, snapping a three-day decline, while a Bloomberg gauge of the US dollar pared some of its gains since the rate increase.

UK government bonds also rallied after the Bank of England (BOE) scrapped plans to sell long-dated gilts as part of its quantitative-tightening programme.

The decision offered relief to a battered market, where 10- and 30-year yields had climbed to their highest levels since 2007 and 1998, respectively.

The BOE left its benchmark rate unchanged on Thursday.

Meanwhile, Japan’s inflation slowed for the first time in four months, largely reflecting the effect of government subsidies. All respondents in a Bloomberg survey expect the BOJ to raise its policy rate to 1.25 per cent from 1 per cent on Friday, with governor Kazuo Ueda scheduled to hold a press conference after.

The yen was little changed, trading around 156.15 per US dollar.

“We expect the BOJ to deliver a 25 basis point hike to 1.25 per cent on Friday – this is now the bare minimum and it would be pretty unimaginable at this point that we don’t get one,” wrote Anthony Malouf, a market analyst at Ebury.

“Governor Ueda will have no choice but to also strike a hawkish note on policy for risk of undoing a lot of the good work achieved via FX intervention.” BLOOMBERG