Japan’s Nikkei 225 index surpassed 50,000 for the first time on Monday, driven by optimism over U.S.-China trade progress and strong Wall Street performance. The index rose over 2%, with the Topix climbing 1.61%.
Ahead of a key meeting between Prime Minister Sanae Takaichi and President Donald Trump during his visit to Japan, Crédit Agricole CIB noted, “It is expected that the message she would convey is to significantly expand domestic demand through a high-pressure economy.”
This move could “completely lift Japan out of its deflationary structural stagnation” and help reduce the U.S. trade deficit, benefiting both nations.
Elsewhere in Asia, South Korea’s Kospi gained 1.83%, while Hong Kong’s Hang Seng Index futures rose slightly. Australia’s ASX/S&P 200 also edged up 0.54%. These gains followed reports that U.S. and Chinese negotiators reached a framework agreement, setting the stage for Presidents Trump and Xi Jinping to formalise the deal.
U.S. Treasury Secretary Scott Bessent told CBS News that Trump’s proposal for 100% tariffs on Chinese imports is “effectively off the table.” China is expected to increase soybean purchases and delay restrictions on rare earth exports, though current U.S. export controls remain.
On Wall Street last Friday, all major indices closed at record highs amid favourable inflation data, boosting hopes for further U.S. Federal Reserve rate cuts. The Dow Jones Industrial Average closed above 47,000 for the first time, while the S&P 500 and Nasdaq Composite also advanced.
Investors now await the anticipated Fed rate cut and upcoming earnings from major tech companies, factors likely to influence markets in the weeks ahead.