Asian stocks rebound as China-US trade tensions cool

Asian markets rallied on Monday after conciliatory remarks from former US President Donald Trump eased fears of renewed China-US trade tensions. Tokyo led the gains, jumping nearly three percent to a record high amid reports that Japan’s ruling party reached a coalition deal, clearing the way for Sanae Takaichi to become the country’s first female prime minister.

Investor confidence was further boosted by stronger-than-expected third-quarter economic growth data from China, following Wall Street’s rebound on Friday. Sentiment had soured last week when Trump threatened 100 percent tariffs on Chinese goods in response to Beijing’s rare-earth export restrictions, prompting tit-for-tat measures and doubts over a planned Trump–Xi meeting.

However, tensions appeared to ease over the weekend as both sides agreed to resume trade talks. Chinese state media reported a “candid and constructive” phone call between Vice Premier He Lifeng and US Treasury Secretary Scott Bessent, with plans for another round of negotiations soon. Trump also told Fox News he would meet Xi at the upcoming APEC summit, calling the proposed tariffs “not sustainable.”

Hong Kong, Shanghai, Seoul, Wellington, Taipei, and Manila all posted solid gains on the improved outlook. Analysts said markets were now pricing in a possible extension of the current “tariff truce” by 90 days, should China offer concessions on rare-earth controls.

Adding to the upbeat mood, US regional banks recovered on Friday after sharp losses earlier in the week, helping reassure investors that concerns over loan-related losses were not systemic.

Key figures at around 0230 GMT

Tokyo - Nikkei 225: UP 2.9 percent at 48,970.40 (break)
Hong Kong - Hang Seng Index: UP 2.2 percent at 25,797.98
Shanghai - Composite: UP 0.6 percent at 3,860.79
Euro/dollar: DOWN at $1.1665 from $1.1670 on 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 percent from 86.88 pence
West Texas Intermediate: DOWN 0.5 percent at $57.24 per barrel
Brent North Sea Crude: DOWN 0.5 percent at $61.02 per barrel
New York - Dow: UP 0.5 percent at 46,190.61 (close)
London - FTSE 100: DOWN 0.9 percent at 9,354.57 (close)