Asian equities are poised for a second consecutive week of robust gains on Friday, while oil prices remain subdued below $100 per barrel. Investors are scaling back risk exposure ahead of a pivotal weekend that could pave the way for a near-term resolution to the Middle East conflict.

A 10-day ceasefire between Lebanon and Israel took effect on Thursday. US President Trump indicated that the next round of talks between the US and Iran could occur this weekend, coinciding with the expiration of the current truce between the two nations.

Investors have swiftly adopted an optimistic stance towards any indications this month suggesting the conflict is nearing its end, despite the Strait of Hormuz—a passage for roughly one-fifth of global oil and gas supplies—remaining largely closed.

This optimism has kept oil prices below the $100 per barrel mark, although they remain significantly higher than pre-war levels. Brent crude futures fell over 1% to $98.14 per barrel. US West Texas Intermediate crude futures declined 1.4% to $93.37 per barrel.

In equity markets, the MSCI's broadest index of Asia-Pacific shares excluding Japan dipped 0.83% as investors took profits following a strong rally this month.

The index still hovers near its highest level since March 2, the first trading day after the outbreak of the Iran war. It has gained 14% in April, following a 13.5% decline the previous month. Nearly all stock markets have recovered to levels seen before the war began in late February.

US stock futures were flat during Asian trading hours, while European equity futures pointed to a subdued opening.

Andrew Chorlton, Chief Investment Officer for Public Fixed Income at M&G, expressed surprise at how quickly markets have been willing to overlook the conflict and energy shock over the past two weeks.

He stated, "There is a fairly strong disconnect between what policymakers and central bank officials are saying about the risks from this conflict and what is being reflected in the markets."

"This seems somewhat complacent," Chorlton added. "It seems unlikely that markets aren't pricing in some additional risk premium, whether for growth or inflation."

The US dollar, which benefited from safe-haven inflows in March, has since relinquished those gains. The euro was last quoted at $1.1782, slightly below a seven-week high reached in the previous session.

US benchmark S&P 500 and the tech-heavy Nasdaq indices edged higher on Thursday, closing at record highs for the second consecutive session.

Nick Twidale, Chief Market Strategist at ATFX Global, commented, "I think the positive tone in equities remains, helped by some solid US earnings, but—and it's a big but—we need to see tangible evidence that peace will hold."

"In my view, that means a full reopening of the Strait of Hormuz; otherwise, we could see a significant correction in global equities in the coming days and weeks."

The closure of the strait has caused one of the most severe oil price shocks in history and prompted the International Monetary Fund to downgrade its global economic outlook, warning that a prolonged conflict could push the world to the brink of recession.

Despite hopes for strong first-quarter earnings, the war has also cast a shadow over the prospects of European companies, from airlines to retailers. Rising energy costs, supply chain disruptions, and slowing economic growth have led to a deteriorating outlook.

The US dollar index, which measures the currency against a basket including the yen and euro, stood at 98.24, hovering near its lowest level since March 2. The index had fallen for eight consecutive sessions through Wednesday.

The risk-sensitive Australian dollar traded at $0.7167, lingering near a four-year high touched on Thursday.

The yen weakened slightly against the dollar to 159.48 as investors assessed remarks from Bank of Japan Governor Kazuo Ueda, who gave no indication of a potential rate hike this month.

These comments will leave traders speculating on the timing of the next rate hike. Due to the lack of clear signals, markets have reduced bets on a rate increase at the BoJ's policy meeting on April 27-28.