HONG KONG — Asian shares were mostly higher Friday on expectations of a deal between the U.S. and Iran to extend their ceasefire in their war by 60 days.

Oil prices slipped on optimism over a de-escalation of the conflict, but remain above pre-war levels as the Strait of Hormuz remains largely closed. Analysts warned that the potential ceasefire extension should be viewed with caution, as it will take time for oil supplies to recover.

U.S. futures edged lower.

Tokyo’s Nikkei 225 jumped 1.8% to 65,814.96 as data released Friday showed that Tokyo’s core inflation rate for May rose more slowly than economists expected.

South Korea’s Kospi gained 2.3% to 8,369.81.

Both benchmarks are trading near record high levels.

Hong Kong’s Hang Seng added 0.4% to 25,098.68, while the Shanghai Composite index fell 0.2% to 4,092.22.

Australia’s S&P/ASX 200 was up 1% at 8,681.80.

Taiwan’s Taiex was trading 2.3% higher.

On Thursday, negotiators from the U.S. and Iran reached a tentative deal on extending their ceasefire and holding a new round of talks on Iran’s nuclear program, a U.S. official said. Iran had not yet publicly confirmed the deal and the tentative agreement was still pending U.S. President Donald Trump’s sign off.

Brent crude, the international standard, slipped 0.8% early Friday to $91.97 a barrel. It was trading around $70 per barrel in late February before the war began. Benchmark U.S. crude lost 1.2% to $87.85 per barrel.

Investors are also closely watching for a reopening of the Strait of Hormuz. The U.S. official said the tentative accord makes it clear that Iran wouldn’t be able to impose tolls on ships transiting the strait, while the U.S. would gradually lift its sea blockade on Iranian ports.

“The oil market continues to edge lower amid growing optimism that the U.S. and Iran are moving toward a deal,” ING commodities strategists Warren Patterson and Ewa Manthey wrote Friday. “A reopening of the strait would offer some immediate relief to the oil market with tankers leaving the Persian Gulf. However, the recovery is still uncertain.”

Shipowners may be reluctant to send vessels into the Persian Gulf, at least initially, over fears that the ceasefire could fail, they wrote. Also a recovery in oil and gas production would likely also be gradual rather than immediate.

On Thursday, Wall Street pushed to more records with the benchmark S&P 500 setting another all-time high, climbing 0.6% to 7,563.63. The Dow Jones Industrial Average added less than 0.1% to 50,668.97, and the technology-heavy Nasdaq composite gained 0.9% to 26,917.47.

Shares of discount retail chain Dollar Tree surged 17.9% after it reported stronger-than-expected profit, while department store retailer Kohl’s jumped 20.6%, also after better-than-anticipated results.

In other dealings early Friday, the U.S. dollar rose to 159.30 Japanese yen from 159.24 yen. The euro was trading at $1.1646, down from $1.1651.

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AP Business Writer Stan Choe contributed to this report.