Asian markets extended their gaining streak for a second straight session on Wednesday, tracking improving global sentiment as geopolitical concerns showed early signs of easing. Market optimism was driven by hopes that United States could broker an end to the nearly month-long Middle East conflict, while investor sentiment was further boosted after Japan signalled an aggressive move to stabilise energy markets.

Japan’s benchmark Nikkei 225 surged over 2.4%, emerging as the top gainer in the region. South Korea’s KOSPI and Taiwan’s Taiwan Weighted Index also posted strong gains of around 1.5-2.4%, reflecting renewed investor confidence in export-driven economies.

Southeast Asian markets followed suit, with Singapore’s Straits Times and Thailand’s SET Composite trading modestly higher, while Indonesia’s Jakarta Composite advanced over 1%.

In contrast, Chinese markets underperformed relative to their peers. The Hang Seng and Shanghai Composite posted only marginal gains amid lingering concerns over economic recovery and capital flows.

Back home, Indian equities also opened higher, with the Sensex and Nifty rising over 1% in early trade. The BSE Sensex climbed 776 points to 74,845, while the Nifty50 gained 246 points to 23,167.

Japan announces biggest-ever oil release

The broader rally came after Japan announced the largest-ever release of oil from its strategic reserves. Prime Minister Sanae Takaichi said the country will begin tapping stockpiles this week, including joint reserves held with producing nations. According to the International Energy Agency, Japan’s contribution to the coordinated release could total nearly 80 million barrels.

Japan will release 30 days’ worth of oil reserves starting Thursday, alongside earlier private sector releases, in a bid to cool fuel prices that recently hit record highs domestically.

The move comes amid global supply disruptions after Iran effectively blocked the Strait of Hormuz following U.S.-Israel strikes on February 28, triggering a sharp spike in crude prices and heightening inflationary concerns.

Brent crude futures climbed back above the $100 per barrel mark as hopes of a swift resolution to the Middle East conflict began to fade. Oil prices had tumbled nearly 10% on Tuesday, while equities rallied after U.S. President Donald Trump delayed fresh strikes on Iran’s energy infrastructure by five days.

However, sentiment has since turned cautious, with Iran rejecting direct talks with the U.S. and launching fresh attacks on its Gulf neighbours, dampening expectations of any near-term de-escalation.

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