Asia-Pacific markets mostly fall as renewed U.S.-Iran clashes keep investors on edge

Asia-Pacific markets mostly traded lower Friday, as concerns grew over renewed hostilities between Iran and the U.S. amid a fragile ceasefire.

The U.S. and Iran traded fire in the Strait of Hormuz, with each side claiming the other initiated the attack.

Despite the escalation, President Donald Trump insisted that the ceasefire remains in effect, saying the strikes are "just a love tap" during a call with an ABC News reporter later Thursday.

Trump later claimed in a subsequent Truth Social post that the U.S. "completely destroyed" the Iranians involved in the exchange, which he said included small boats and drones that "dropped ever so beautifully down to the Ocean, very much like a butterfly dropping to its grave!"

He reiterated that Iran will face further attacks if they do not agree to a nuclear deal.

"Just like we knocked them out again today, we'll knock them out a lot harder, and a lot more violently, in the future, if they don't get their Deal signed, FAST!" Trump wrote.

Oil futures pared early gains. The West Texas Intermediate futures for June was 0.41% higher at $95.2 per barrel as of 3:35 a.m. ET. Brent crude futures for July gained 0.81% at $100.87 per barrel.

South Korea's Kospi rose in choppy trade, ending Friday's session 0.11% higher at 7,498, while the small-cap Kosdaq added 0.71% to 1,207.72.

Japan's Nikkei 225 slipped 0.19% to 62,713.65 amid some profit-taking after hitting a record high on Thursday. Toyota Motor fell 2.18% after it reported that its fourth-quarter operating profit had slumped 49%, weighed down by U.S. tariffs.

Australia's S&P/ASX 200 lost 1.51% at 8,744.40.

Mainland China's CSI 300 index was trading 0.58% lower at 4,871.91, while Hong Kong's Hang Seng index last traded down 0.85% in the last hour of afternoon trade on Friday.

India's Nifty 50 declined 0.67%.