Global stock markets have posted significant gains as indications of easing trade tensions between China and the US continue to emerge. The Tokyo market reached a new record high, buoyed by the impending swearing-in of a new prime minister in Japan, which is expected to bring an end to a period of political uncertainty.
Investors have returned to buying mode following a turbulent week sparked by US President Donald Trump’s threat to impose 100% tariffs on China over rare earth export controls. Trump has since toned down his rhetoric, expressing optimism about an upcoming meeting with Chinese President Xi Jinping at the APEC summit in South Korea. He emphasized his desire for a “fair” trade deal and spoke positively about his relationship with Xi, stating that he wants to maintain good relations with China.
The US president’s conciliatory remarks have contributed to a surge in Wall Street, with the tech-led rally pushing markets to record highs. According to Rodrigo Catril of National Australia Bank, markets are hopeful about a potential thaw in US-China relations, with Trump highlighting rare earths, fentanyl, and soybeans as key issues ahead of trade talks.
Asian markets have seen significant gains, with Hong Kong, Shanghai, Singapore, Sydney, Seoul, Taipei, Manila, and Jakarta all posting positive returns. Tokyo’s Nikkei 225 index climbed over 1% to a new high, following a 3.4% surge on Monday, as Japan prepares to swear in its first female prime minister, Sanae Takaichi. Her premiership is expected to bring stability and potentially aggressive monetary easing, which has cheered investors.
China’s leaders are currently holding a four-day conclave to discuss strategies for addressing sluggish household spending and woes in the property sector. This comes after data showed that China’s economic growth slowed to its lowest rate in a year during the third quarter. In company news, Australian mineral producers have rallied following a deal between Trump and Australian Prime Minister Anthony Albanese to increase rare earth shipments to the US.
Key market figures as of 0230 GMT include the Tokyo Nikkei 225 up 1.5% at 49,929.81, the Hong Kong Hang Seng Index up 1.5% at 26,225.09, and the Shanghai Composite up 0.6% at 3,885.92. The euro and pound are down against the dollar, while the dollar is up against the yen. Oil prices have fallen, with West Texas Intermediate down 0.5% at $57.22 per barrel and Brent North Sea Crude down 0.3% at $60.82 per barrel. The New York Dow is up 1.1% at 46,706.58, and the London FTSE 100 is up 0.5% at 9,403.57.