Asian markets surged Monday following conciliatory remarks from U.S. President Donald Trump that eased fears of escalating trade tensions with China, while Tokyo stocks soared to a record high on news of a breakthrough in Japan’s political deadlock.
Investor sentiment was buoyed by weekend developments indicating renewed dialogue between Washington and Beijing. Chinese state media reported that Vice Premier He Lifeng and U.S. Treasury Secretary Scott Bessent held “candid, in-depth and constructive exchanges,” with both sides agreeing to resume trade negotiations “as soon as possible.”
The diplomatic thaw followed a week of heightened tensions, during which Trump threatened 100 percent tariffs in response to China’s rare earth export controls. However, in an interview aired by Fox News, Trump confirmed plans to meet Chinese President Xi Jinping at the upcoming APEC summit, calling the proposed tariffs “not sustainable.”
Markets responded positively. Hong Kong’s Hang Seng Index rose 2.2%, Shanghai’s Composite gained 0.6%, and Seoul, Wellington, Taipei, and Manila also posted solid advances. Analysts said Trump’s softened tone helped stabilize expectations. “Markets appear priced for a positive or at least less-bad outcome,” said Chris Weston of Pepperstone, noting that a 90-day extension of the current tariff truce is now seen as likely.
Tokyo’s Nikkei 225 led the regional rally, jumping 2.9% to a record 48,970.40. The surge followed news that Japan’s ruling party is set to finalize a coalition agreement, clearing the path for Sanae Takaichi to become the country’s first female prime minister. Her candidacy had faced uncertainty after a key alliance partner withdrew support last week.
Wall Street’s rebound on Friday also contributed to the upbeat mood. U.S. regional banks, including Zions Bancorp and Western Alliance Bancorporation, recovered after Thursday’s losses linked to problem loan disclosures, easing concerns about broader financial instability.
Meanwhile, China’s third-quarter economic data showed growth in line with expectations, though at its slowest pace in a year, reinforcing hopes that Beijing may offer concessions to preserve trade stability.
Key Market Figures (as of 0230 GMT):
- Tokyo – Nikkei 225: ↑ 2.9% at 48,970.40
- Hong Kong – Hang Seng Index: ↑ 2.2% at 25,797.98
- Shanghai – Composite: ↑ 0.6% at 3,860.79
- Euro/Dollar: ↓ $1.1665
- Pound/Dollar: ↑ $1.3436
- Dollar/Yen: ↑ 150.97 yen
- Euro/Pound: ↓ 86.82 pence
- WTI Crude: ↓ 0.5% at $57.24/barrel
- Brent Crude: ↓ 0.5% at $61.02/barrel
- New York – Dow Jones: ↑ 0.5% at 46,190.61
- London – FTSE 100: ↓ 0.9% at 9,354.57
