Asian markets have rebounded following conciliatory comments from US President Donald Trump, which helped to ease concerns about China-US trade tensions. The comments, made over the weekend, contributed to a positive market sentiment, with Tokyo stocks surging to a record high after news of a deal to end political turmoil in Japan.
Investors were also encouraged by data showing that China’s economy grew more than expected in the third quarter, despite being at its slowest pace in a year. This growth, combined with the positive mood from Wall Street, where all three main indexes bounced back from Thursday’s losses, helped to boost market confidence.
Last week, trade tensions between the US and China had escalated, with President Trump threatening to impose 100 percent tariffs on Chinese goods in response to China’s controls on rare earth exports. However, over the weekend, the two sides agreed to hold more trade talks, with Chinese state media reporting that Vice Premier He Lifeng and US Treasury Secretary Scott Bessent had held “candid, in-depth and constructive exchanges” during a call.
Markets across Asia rose on the softer tone, with Hong Kong’s Hang Seng Index up more than two percent and Shanghai’s Composite Index also gaining. Seoul, Wellington, Taipei, and Manila also saw significant rallies. According to Chris Weston, an analyst at Pepperstone, “markets appear priced for a positive or at least less-bad outcome” following President Trump’s remarks.
In Japan, the Nikkei 225 Index jumped nearly three percent to a new peak after the country’s ruling party announced plans to sign a new coalition deal, paving the way for Sanae Takaichi to become the country’s first female prime minister. The deal helped to alleviate concerns about political instability in Japan, which had weighed on the market last week.
The recovery in US regional bank stocks on Friday also contributed to the positive market sentiment, with investors becoming less fearful of systemic problems. The bounce-back in these stocks, including Salt Lake City-based Zions Bancorp and Phoenix-based Western Alliance Bancorporation, suggested that investors were more confident in the banking sector.
Key figures at around 0230 GMT included the Tokyo Nikkei 225 Index, which was up 2.9 percent at 48,970.40, and the Hong Kong Hang Seng Index, which gained 2.2 percent to 25,797.98. The Shanghai Composite Index rose 0.6 percent to 3,860.79, while the euro/dollar exchange rate fell to $1.1665 from $1.1670 on Friday.
The easing of trade tensions between the US and China has significant implications for global markets, and investors will be closely watching developments in the coming weeks. With the US and China agreeing to hold more trade talks, there is hope that a resolution to the trade dispute may be imminent, which could help to boost market confidence and drive economic growth.