- Asian stocks appreciate amid easing trade tensions between the US and China, the two largest economies.
- US and Chinese negotiators reached consensus on key disputes, paving the way for Trump and Xi to finalize a trade deal Thursday.
- Japan’s Nikkei 225 jumped above 50,000, driven by expectations of major fiscal spending under Prime Minister Sanae Takaichi.
Asian stocks start the week on a strong foot amid easing United States (US)-China trade tensions. The top negotiators US and China reached a consensus on major disputes and paved the way for Presidents Donald Trump and Xi Jinping to meet on Thursday in South Korea to finalize a trade deal aimed at easing tensions. Traders are expected to focus on central bank meetings and megacap earnings.
According to CBS News, US Treasury Secretary Scott Bessent said that President Trump’s threat to impose 100% tariffs on Chinese goods “is effectively off the table.” Bessent added that China has agreed to make “substantial” soybean purchases and to postpone its rare-earth export controls “for a year while they re-examine it.”
Japan’s Nikkei 225 rises 2% to trade near 50,300 at the time of writing, while Hong Kong’s Hang Seng gains 1% to move above 26,400, and South Korea’s KOSPI advances 2% to trade around 4,000. Additionally, China’s Shanghai Composite rises 1% to reach near 4,000, while the Shenzhen Component gains 1.26%, rising to nearly 13,450.
Asian markets also draw support from a subdued US Dollar (USD) as softer US inflation data helps in keeping the likelihood of the Federal Reserve (Fed) rate cuts higher. The CME FedWatch Tool indicates that markets are now pricing in nearly a 97% chance of a Fed rate cut in October and a 96% possibility of another reduction in December.
Japan’s Nikkei surged past the 50,000 mark for the first time on Monday, extending its record-breaking rally amid expectations of significant fiscal spending from the nation’s new Prime Minister Sanae Takaichi, per Reuters.
