Yes, they will. Not sure what the situation is at the moment but at the end of August everything that was indexed in Russian, Thai, Arabic and Indian Scripts shot to the top of Google. This happend about 18th August, but by September 1st they all seemed to drop out again. Not quite sure whether Google was just testing the system or whether they activively decided that they could not have a bunch of parking pages dominating their listings.
Longer-term IDN will be back and their SEO advantage in Asia will be decisive. In Latin IDN the picture is less clear as Search tends not to distinguish between accented and non-accented forms. My personal feeling is that Latin IDNs will get parity with ASCII equivalents. In Japan and China Pinyin and Romanji ASCII domains will largely be consigned to the scrap heap of history.