Asian stock markets traded higher on Wednesday, tracking strong gains on Wall Street as investors welcomed signs of diplomatic progress between the United States and Iran that could lead to the reopening of the Strait of Hormuz. The prospect of restoring one of the world's most important energy shipping routes improved market sentiment by reducing concerns over global oil supply disruptions.

Japan and South Korea led regional gains, while Australia's benchmark equity index touched a fresh intraday record. The broader MSCI Asia Pacific Index gained around 1 percent following a strong overnight session in the United States, where the S&P 500 closed at a record high and the Nasdaq 100 posted significant gains driven by technology stocks.

Crude oil prices declined as expectations grew that an interim agreement could allow commercial shipping through the Strait of Hormuz to resume. West Texas Intermediate crude fell about 1 percent to nearly 75 dollars per barrel. Lower oil prices are expected to ease inflationary pressures globally, reducing the likelihood of additional interest rate hikes by the US Federal Reserve.

US Treasury yields also moved lower as investors reduced expectations for tighter monetary policy. The decline in bond yields reflected growing confidence that softer energy prices could support inflation moderation despite a resilient US labour market.

Market participants will now closely monitor developments in the Middle East to assess whether diplomatic progress can sustain the decline in energy prices. Investors are also awaiting the upcoming US employment report, which could significantly influence the Federal Reserve's policy outlook. A stronger-than-expected labour market could revive expectations of future rate hikes, while weaker economic data may reinforce the case for keeping interest rates unchanged.