Asian Markets Rally as US-China Trade Tensions Ease and China Posts Stronger Growth

Asian markets surged on Monday as easing tensions between the United States and China, coupled with stronger-than-expected Chinese economic data, lifted investor sentiment.

The upbeat mood built on Wall Street’s rebound on Friday, where all three major US indexes recovered from the previous day’s losses.

Markets had been rattled last week after US President Donald Trump threatened to impose 100 percent tariffs on Chinese goods in response to Beijing’s new export controls on rare earth metals. The tit-for-tat measures sparked fears of a renewed trade war and uncertainty over a planned meeting between Trump and Chinese President Xi Jinping.

However, tensions appeared to cool over the weekend after both sides agreed to resume trade talks. Chinese state media reported that Vice Premier He Lifeng and US Treasury Secretary Scott Bessent held “candid, in-depth and constructive exchanges,” with plans for another round of negotiations “as soon as possible.”

Just hours before the call, Trump told Fox News that he would indeed meet Xi at next week’s APEC summit, adding that the proposed 100 percent tariff was “not sustainable.”

The conciliatory tone helped fuel a broad rally across Asia. Hong Kong climbed 2.2 percent, Shanghai gained 0.6 percent, while Tokyo’s Nikkei 225 jumped 2.9 percent to a record 48,970.40, leading regional gains. Markets in Seoul, Wellington, Taipei, and Manila also advanced.

“Catalysed by Trump’s remark… markets appear priced for a positive or at least less-bad outcome,” said Chris Weston of Pepperstone. “The base case now seems to be that China will offer concessions on its rare-earth export controls, paving the way for the US to extend the current 30 percent ‘tariff truce’ by another 90 days beyond its November 10 deadline.”

Tokyo’s gains were further buoyed by expectations that Japan’s ruling party will finalize a coalition deal on Monday, clearing the path for Sanae Takaichi to become the country’s first female prime minister.

Adding to the optimism, US regional banks staged a comeback Friday, easing fears of broader financial stress after two mid-sized lenders, Zions Bancorp and Western Alliance Bancorporation, reported expected losses tied to problem loans.

Key Market Figures (as of 0230 GMT)

• Tokyo – Nikkei 225: UP 2.9% at 48,970.40
• Hong Kong – Hang Seng Index: UP 2.2% at 25,797.98
• Shanghai – Composite: UP 0.6% at 3,860.79
• Euro/dollar: DOWN at $1.1665 (from $1.1670 Friday)
• Pound/dollar: UP at $1.3436 (from $1.3433)
• Dollar/yen: UP at 150.97 yen (from 150.50 yen)
• Euro/pound: DOWN at 86.82 pence (from 86.88 pence)
• WTI Crude: DOWN 0.5% at $57.24 per barrel
• Brent Crude: DOWN 0.5% at $61.02 per barrel
• New York – Dow Jones: UP 0.5% at 46,190.61 (close)
• London – FTSE 100: DOWN 0.9% at 9,354.57 (close)