SYDNEY - Asian stocks joined a global rally on June 12 on hopes a Middle East peace deal may finally materialise, while the US dollar and bond yields dropped and oil prices fell to two-month lows, tempering inflation fears.Japan’s Nikkei surged 4.3 per cent, while Australia’s resources-heavy shares climbed 1.8 per cent. South Korea’s Kospi index soared 8.3 per cent.Singapore’s Straits Times Index joined the rally, rising 1.1 per cent as at 9.06am.Overnight, Wall Street rallied with the three major indexes registering their biggest daily gains since April 8 when the United States and Iran agreed to a temporary ceasefire. The Nasdaq ralled 2.5 per cent, helped by expectations of a strong market debut of Elon Musk’s SpaceX.President Donald Trump said on June 11 that a peace deal could be signed as soon as this weekend, hours after threatening more strikes on Iran. He said negotiations with Tehran had advanced to the highest levels of Iran’s leadership and had been approved by a broad coalition of regional powers.Trump’s remarks follow repeated bouts of optimism from the president that have failed to yield a deal, rattling market sentiment.Nonetheless, “This does look perhaps a bit more tangible than we have had,” said Ray Attrill, head of FX strategy at the National Australia Bank.“If we hear something from Iran that sounds positive, the odds (of a peace deal) are clearly going to flip quite dramatically.”The deal, if confirmed, would be the most significant diplomatic breakthrough yet to end the three-month-old war, which has sent global energy prices sharply higher. The European Central Bank had to raise interest rates for the first time in nearly three years to nip war-driven inflation in the bud.Crude oil prices slumped to two-month lows on the news of a possible peace deal. US West Texas Intermediate (WTI) crude futures fell 1.9 per cent to US$86.08 a barrel, on top of a 2.6 per cent drop overnight. The global oil benchmark Brent dropped 1.5 per cent at US$89.08 per barrel, having fallen nearly 3 per cent overnight.The safe haven US dollar nursed losses. The dollar index , which measures the greenback against its major peers, held at 99.78, having lost 0.4 per cent overnight.It edged up 0.1 per cent to 160.19 yen, after retreating 0.4 per cent on the prior session. Traders are still on high alert for any intervention from Japanese authorities as the yen stays below the critical 160 level.Precious metals caught some relief from the lower US dollar. Spot gold rose 0.2 per cent to US$4,222 an ounce, following a 3.5 per cent jump overnight, while spot silver rose 0.3 per cent to US$67.52 an ounce, after a 5.8 per cent gain. REUTERS