Stocks rise, yields ease as oil slips on Trump hint at short bombing campaign

Most Asian stocks enjoyed a healthy recovery Thursday following a drab start to the week as bond yields and oil prices dropped after Donald Trump suggested the latest US attacks against Iran would likely be short-lived.

Trading floors have been jolted since US strikes on Islamic republic targets in the Strait of Hormuz sparked tit-for-tat exchanges between the two and sent crude rallying as much as 10 percent.

The flare-up, which broke weeks of relative calm around the waterway -- a crucial transit for a fifth of global oil and gas -- fanned fears of another step up in already-elevated inflation and put pressure on central banks to hike interest rates.

It also came just days after a hawkish speech by Federal Reserve boss Kevin Warsh that was seen by investors as a pivot towards a possible tightening of monetary policy.

Sentiment was given a much-needed boost Wednesday after the US president said the latest round of strikes could be over soon.

Asked how long the bombing campaign could last, he told reporters: "I don't think too long."

Meanwhile, CNN cited US officials as saying the military escorted 40 commercial ships loaded with 18 million barrels of crude through the strait, a wartime high.

The two main contracts Brent and West Texas Intermediate pared their gains Wednesday and on Thursday they edged lower, though news of fresh US attacks tempered the selling.

Yields on 10-year US Treasuries and Japanese government bonds of the same length both dipped.

The latest developments helped all three main US indexes higher, and Asia followed suit.

Tokyo, Seoul, Hong Kong, Shanghai, Sydney, Singapore, Taipei and Jakarta were all up.

Weak US economic data also provided support. August private jobs creation coming in below expectations -- and down from the previous month -- along with job openings also missing forecasts, eased pressure on the Fed to hike borrowing costs.

Focus is now on the release Friday of the closely watched non-farm payrolls figures and next week's consumer price index, which could play an outsized role in the Fed's decision-making ahead of its September 16 rate decision.

The soft readings "finally offered a little relief... (and) gave the bond market a reason to stop climbing the stairs for a moment", wrote Stephen Innes at Quintex Intel.

"Treasury yields eased, and stocks could finally breathe," he added.

"The market is not suddenly celebrating weaker growth. It is simply rediscovering that slightly bad news may be exactly what it needs right now, especially if the alternative is a Fed that feels compelled to keep tightening into an oil shock."