SYDNEY - Asian shares turned hesitant on Thursday as news of a fresh US military strike in Iran challenged investor optimism on a near-term ​peace deal, while US inflation data loomed as a threat for bonds and interest rates.

"Over the next two weeks, we expect either a deal for a new ceasefire, or the current ceasefire will have collapsed with active hostilities resuming," said Madison ​Cartwright, a senior geo-economics analyst at CBA.

He put a 70 percent probability on a deal being agreed, while cautioning that the fate of ​the Strait of Hormuz was up in the air.

"Insurance through the strait has become prohibitively expensive and it's unclear how and at what price insurance will be made available," he added. "It is also not clear if Iran will charge a toll, or a toll by another ​name."

With transits of the strait still only at a trickle, Brent crude rebounded 2.3 percent to $96.50 a barrel, while US crude added 2.2 percent to $90.59.

Yields on 10-year ​notes edged up 2 basis points to 4.502 percent as the risk of oil staying high kept upward pressure on inflation expectations.

It also took a little steam out of the tech-driven bull run in stock markets, with Japan's Nikkei easing 0.2 percent, while South Korean shares went flat. MSCI's broadest index of Asia-Pacific shares outside Japan dipped 0.1 percent.

Reports from Japan ​suggested the government planned to issue "bridging bonds" to fund flagship programs aimed at boosting investment in growth and economic security.

For Europe, EUROSTOXX 50 futures ​and DAX futures both slipped 0.2 percent, while FTSE futures lost 0.3 percent. S&P 500 futures and Nasdaq futures added 0.1 percent.

Inflation data to test Fed

The focus now shifts to US data ‌on personal consumption expenditures (PCE), which include the Federal Reserve's preferred measures of inflation.

The pulse from fuel is expected to lift the headline PCE to a three-year high of 3.8 percent, while the core is forecast to rise 0.3 percent to an annual 3.3 percent and far above the Fed's 2 percent target.

The pick-up has led more Fed members to call for dropping its easing bias, or even preparing for a rate hike.

"With inflation well above target but the growth impact of the conflict still ​uncertain, the Fed faces genuine two-sided ​risk," argued analysts at NAB ⁠in a note.

"We see that uncertainty as the argument for holding rates through end-2027, whereas a firming in services core inflation would sharpen the case for higher-for-longer and a sharp moderation would shift attention to the emerging growth ​headwinds."

Markets imply a 50-50 chance of a quarter-point rise in the funds rate to a range of 3.75-4.0 percent ​by year-end.

The shift in Fed expectations has helped underpin the US dollar, which was trading at 99.291 against a basket of currencies to be steady on the week.

The dollar crept to a four-week top on the yen at 159.57, nearing the 160.00 barrier that has triggered Japanese forex intervention in the past.

The euro was a shade lower at $1.1620 , though ​it has support from expectations the European Central Bank will hike interest rates when ​it meets in June.

Speaking on Thursday, ECB Chief Economist Philip Lane emphasised the importance of preventing the spike in energy costs from feeding into higher inflation expectations.

In commodity markets, gold eased 0.3 percent ​to $4,445 an ounce, having again seen scant support as a safe haven or as a hedge against inflation risks.