TOKYO: Asian shares rallied on Thursday with a decline in U.S. Treasuries pointing to a tentative recovery in risk ​appetite that has been hammered by the escalating war in the Middle East. South Korea’s KOSPI gauge recovered ‌its steep losses in the prior session following a rally on Wall Street on hopes the United States and Iran will seek an off-ramp from hostilities. Oil and gold traded higher. China set its growth target at a slightly lower pace than the previous year in a closely watched, wide-ranging economic ​plan. The U.S. Senate backed President Donald Trump’s military campaign against Iran, suggesting no quick resolution to a war that has ​roiled financial markets, transportation networks, and energy production. “Geopolitical risk can flare up again very quickly, so ⁠any early gains we see this morning across Asia-Pacific region share markets may not last,” Paco Chow, dealing manager at Moomoo ​Australia and New Zealand, said in a note. “The outlook will remain cautious until we see oil flows return to normal.” MSCI’s broadest index ​of Asia-Pacific shares outside Japan jumped 2.9%. South Korea’s KOSPI led regional benchmarks with a 10.4% surge, while Japan’s Nikkei jumped 2.9%. The yield on benchmark US 10-year notes rose 2.7 basis points to 4.109%, as the 30-year bond yield rose 3.1 basis points to 4.7479%. The U.S.-Israel war on Iran widened ​sharply on Wednesday after a U.S. submarine sank an Iranian warship and NATO air defences destroyed an Iranian ballistic missile fired towards ​Turkey. But equity markets in Europe and the U.S. took solace from a pledge by Trump to provide protection to shippers and a New York Times report ‌that Iranian ⁠intelligence had reached out to the CIA early in the war about a path towards ending it. Iran later rejected the report, while in the U.S., the Republican-led Senate voted to block a bipartisan resolution aiming to stop the air war. Concerns about energy supply continued to drive up oil prices. U.S. crude rose 3.01% to $76.91 a barrel and Brent rose to $83.43 per barrel, up 2.49% on ​the day. Spot gold rose 0.84% ​to $5,178.42 an ounce. “The market continues ⁠to trade on headlines, and we’re likely to see further volatility ahead,” Henry Russell, a London-based economist for ANZ, said on a podcast. “We’re seeing energy supply still facing constraints with production facilities ​going offline and more likely to follow if this conflict persists any longer.” China set its economic ​growth target for 2026 ⁠at 4.5%-5%, a slight downgrade from the 5% pace achieved last year, leaving room for efforts to curb industrial overcapacity and rebalance the economy. Beijing also released its 15th five-year plan, pledging investments in innovation, high-tech industries, and a “notable” increase in household consumption. China’s blue-chip CSI300 Index ⁠gained nearly ​1% in early trading, while the Shanghai Composite Index added 0.4%. The greenback took ​a breather after recent gains on safe-haven demand. The dollar index , which measures the greenback against a basket of currencies, was flat at 98.81. The Japanese yen advanced ​0.2% to 156.75 per dollar. In cryptocurrencies, bitcoin fell 0.78% to $72,774.53 while ether declined 0.94% to $2,130.43.