SYDNEY - Asian stocks joined a global rally on Friday on hopes a Middle East peace deal may finally ​materialize, while the dollar and bond yields dropped and oil prices fell to two-month lows, tempering inflation fears.

All eyes are on the ‌hotly-awaited market debut of Elon Musk's SpaceX, which has made history with the biggest-ever initial public offering. The IPO raised a record $75 billion, valuing the rocket and spacecraft manufacturer at $1.77 trillion and making Musk the world's first trillionaire.

US President Donald Trump said on Thursday that a peace deal could be signed as soon as this weekend, hours after threatening more strikes on ​Iran.

Trump's remarks follow repeated bouts of optimism from the president that have failed to yield a deal, keeping markets on edge.

Nonetheless, "this does look perhaps a bit more tangible than we have had," said Ray Attrill, head of FX strategy at National Australia Bank.

"If ​we hear something from Iran that sounds positive, the odds (of a peace deal) are clearly going to flip quite dramatically."

The European Central Bank had to raise interest rates for the first time in nearly three years on Thursday to nip conflict-driven inflation in the bud.

Oil prices slumped to two-month lows on the news of an agreement before trimming some of the ​losses. US West Texas Intermediate (WTI) crude futures were last down 1.2 percent to $86.69 a barrel, on top of a 2.6 percent drop overnight. Brent dropped 1.1 percent at $89.40 ​per barrel, having fallen nearly 3 percent overnight.

MSCI's broadest index of Asia-Pacific shares outside Japan jumped 3.2 percent, led by a 7.4 percent surge in South Korea's KOSPI. Japan's Nikkei rose 2.7 percent.

Overnight, Wall Street rallied with the three major indexes registering their biggest daily gains since April 8. The Nasdaq jumped 2.5 percent, helped by expectations of a strong market debut for Musk's SpaceX.

IG estimates the expected market cap of SpaceX at the close of business on day 1 would be just over $2.4 trillion.

"It suggests that SpaceX's market cap ... will be about 35 percent ​higher than the $1.78 trillion valuation set ​for the IPO," Tony Sycamore, analyst at IG, said in a note. "This, in turn, suggests the SpaceX share price will likely finish today somewhere in the ~$175/$180 range."

Treasuries held onto gains as hopes of a peace deal in the Gulf led markets to trim bets ​of a rate hike from the Federal Reserve this year. Pricing for a hike in October has come down ​to 36 percent from 51 percent.

Two-year Treasury yields were steady at 4.074 percent on Friday, having slumped 6 basis points (bps) overnight. Benchmark 10-year Treasury yields held at 4.4710 percent, after falling almost 8 bps overnight.

The dollar stabilized after overnight losses. It rose 0.2 percent to 160.20 yen , after retreating 0.4 percent in the prior session. Traders are still on high alert for intervention from Japanese authorities ​as the yen stays close to the 160 level that many see as a line in ​the sand.

The Australian and New Zealand dollars , were down about 0.3 percent each against the greenback, following overnight jumps.

Precious metals resumed declines on Friday. Spot gold slipped 0.6 percent to $4,189 an ounce, following a ​3.5 percent jump overnight, while spot silver also fell 0.6 percent to $66.93 an ounce, after a 5.8 percent gain.