Asian markets rally on tame inflation; oil stays buoyant amid Gulf war deadlock

Asian equity markets rallied on August 13, 2026, following U.S. inflation data that met expectations and reduced the perceived likelihood of a Federal Reserve interest rate hike. South Korean shares led the region with a 3.7% jump, while the Nikkei gained 1.67%. Market sentiment shifted as money markets now price in only a 40% chance of a rate increase next month, down from 54% a week ago. In the commodities sector, oil prices remained elevated near $80 a barrel due to a diplomatic deadlock between Washington and Tehran regarding the Gulf War. Currency markets saw the dollar soften against the yen to 159 amid speculation of an early Bank of Japan rate hike. Meanwhile, Thailand’s economy showed signs of strain, with second-quarter growth slowing to 1.7% as weak household consumption offset gains in exports and private investment.