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.MSCI’s broadest index of Asia-Pacific shares outside Japan jumped 3.8 per cent, led by a 8.15 per cent surge in South Korea’s Kospi index. Japan’s Nikkei rose 3.3 per cent while Hong Kong’s Hang Seng gained 2 per cent.Singapore’s Straits Times Index joined the rally, up 0.6 per cent at the midday trading break, after rising as much as 1.1 per cent in the morning.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.Oil prices slumped to two-month lows on the news of a possible peace deal before trimming some of the losses. US. West Texas Intermediate (WTI) crude futures were last down 1.2 per cent to US$86.69 a barrel, on top of a 2.6 per cent drop overnight. The global oil benchmark Brent dropped 1.1 per cent to US$89.40, having fallen nearly 3 per cent overnight.The afe haven US dollar stabilised after overnight losses. It rose 0.2 per cent to 160.20 yen, after retreating 0.4 per cent in the prior session. Traders are still on high alert for intervention from Japanese authorities as the yen stays close to the 160 level that many see as a line in the sand.Precious metals resumed declines on June 12. Spot gold slipped 0.6 per cent to US$4,189 an ounce, following a 3.5 per cent jump overnight from the lower US dollar. Spot silver also fell 0.6 per cent to US$66.93 an ounce, after a 5.8 per cent gain. REUTERS