Japanese and South Korean stocks rebounded sharply from a market rout triggered by the US-Israeli attack on Iran, as strong US economic data provided crucial support.

The Kospi index surged as much as 12% to 5,695.64, while the Nikkei 225 Stock Average rose up to 4.1% to 56,441.13. This rebound followed the US service economy expanding in February at the fastest pace since mid-2022, driven by robust orders growth and business activity. Takashi Ito, a senior strategist at Nomura Securities, emphasized the significance, stating, 'US employment and ISM non-manufacturing index data confirmed the strength of the real economy, giving the stock market a breath of relief.'

The market reaction highlights how geopolitical tensions can be temporarily overshadowed by domestic economic fundamentals. Investors, seeking stability, shifted focus towards the robust US data, which reassured them about global economic resilience despite the Middle East conflict. This shift in sentiment underscores the critical role domestic economic indicators play in global market dynamics during periods of international uncertainty.