Hong Kong — Asian stocks jumped on Monday after Donald Trump struck a more conciliatory tone toward China over the weekend, easing fears of another trade showdown between the world’s two largest economies.
Adding to the upbeat sentiment, Tokyo’s market surged to a record high following reports of a new coalition deal that ends weeks of political uncertainty in Japan.
Trade Tensions Cool
Just days ago, investors were rattled when Trump threatened 100 percent tariffs on Chinese goods starting November 1, in retaliation for Beijing’s export controls on rare earth minerals.
The move had triggered another round of tit-for-tat exchanges, and Trump even hinted that his planned meeting with Chinese President Xi Jinping might be canceled.
But over the weekend, the tone changed dramatically.
Chinese state media reported that Vice Premier He Lifeng and U.S. Treasury Secretary Scott Bessent held “candid and constructive” talks, agreeing to schedule another round of trade negotiations “as soon as possible.”
And in a Fox News interview released just hours earlier, Trump said he would, in fact, meet Xi at the APEC summit, admitting that the proposed 100 percent tariffs were “not sustainable.”
Markets React Positively
The friendlier signals were enough to spark a broad rally across Asian markets.
- Hong Kong’s Hang Seng Index rose more than 2 percent,
- Shanghai’s Composite Index gained 0.6 percent, and
- Seoul, Taipei, Wellington, and Manila also saw strong gains.
Even though China’s newly released GDP data confirmed slower growth — at 4.8 percent for the July–September quarter, the weakest pace in a year — the figure still met expectations, reinforcing confidence that the economy remains on stable footing.
“Catalysed by Trump’s remark, markets appear priced for a positive or at least less-bad outcome,” said Chris Weston of Pepperstone.
He added that investors now expect China to ease restrictions on rare-earth exports, which could lead the U.S. to extend the current 30 percent tariff truce by another 90 days beyond its November 10 deadline.
Tokyo Leads the Way
Japan’s Nikkei 225 led the rally, soaring nearly 3 percent to hit a record 48,970.40.
The surge came after news that Japan’s ruling party reached a new coalition deal, clearing the way for Sanae Takaichi to become the country’s first female prime minister.
Takaichi’s rise had briefly been thrown into doubt last week when her party’s alliance partner withdrew support, sparking volatility in Japanese markets. Monday’s resolution — and the historic leadership milestone — sent a wave of optimism through investors.
Wall Street’s Rebound Adds Fuel
Asian markets also drew strength from Wall Street’s rebound on Friday, where all three major indexes — the Dow Jones, S&P 500, and Nasdaq — ended higher after snapping earlier losses.
Much of that optimism came from a recovery in U.S. regional banks, including Zions Bancorp and Western Alliance Bancorporation, which had slumped the day before on fears of loan losses.
The bounceback helped calm worries of broader financial contagion, boosting confidence heading into the new trading week.
Key Market Figures (as of 02:30 GMT)
| Market / Currency / Commodity | Change | Latest Level |
|---|---|---|
| Tokyo – Nikkei 225 | 🔼 +2.9% | 48,970.40 (record high) |
| Hong Kong – Hang Seng | 🔼 +2.2% | 25,797.98 |
| Shanghai – Composite | 🔼 +0.6% | 3,860.79 |
| Euro / Dollar | 🔽 $1.1665 | (from $1.1670 Friday) |
| Pound / Dollar | 🔼 $1.3436 | (from $1.3433 Friday) |
| Dollar / Yen | 🔼 ¥150.97 | (from ¥150.50 Friday) |
| Euro / Pound | 🔽 86.82 pence | (from 86.88 pence) |
| WTI Crude | 🔽 -0.5% | $57.24 per barrel |
| Brent Crude | 🔽 -0.5% | $61.02 per barrel |
| New York – Dow Jones (Friday close) | 🔼 +0.5% | 46,190.61 |
| London – FTSE 100 (Friday close) | 🔽 -0.9% | 9,354.57 |
Outlook
With fresh trade talks now on the horizon and political calm returning to Japan, analysts say Asia’s markets could maintain momentum — though much still hinges on how U.S.–China negotiations unfold in the coming weeks.
For now, investors appear to be taking comfort in the cooling rhetoric, betting that both sides will avoid reigniting a full-scale trade war — at least for the moment.
