Stocks Rise as Trade Tensions Ease, Japan Rallies: Markets Wrap
(Bloomberg) — Asian equities advanced Monday, buoyed by signs of easing trade frictions and expectations that pro-stimulus Sanae Takaichi will be elected as Japan’s next prime minister.
The MSCI Asia Pacific Index advanced 1.6%, rebounding after two consecutive weekly losses. The Nikkei 225 index headed to a new high as leaders of Japan’s ruling Liberal Democratic Party and the opposition Ishin party reached an agreement to form a coalition. The yen weakened against the dollar.
Market sentiment improved as President Donald Trump sought to ease trade tensions with China after markets were rattled on Friday by US bank credit woes. A new round of US-China trade talks is set for this week with Treasury Secretary Scott Bessent and Vice Premier He Lifeng facing the task of negotiating down new escalatory measures. Shares in Hong Kong extended their gains even as China’s growth slowed to the weakest pace in a year, as focus shifted to a key political meeting.
“The markets are pricing in that things will de-escalate,” wrote Kyle Rodda, a senior market analyst at Capital.com in Melbourne. “However, the markets are likely to remain jittery until such backdowns are explicitly announced.”
In other corners of the market, the yield on the 10-year Treasury gained almost one basis point to 4.02%. Gold edged up while a gauge of the dollar was flat. Oil slipped.
When asked in an interview with Fox News on Sunday about his threat to raise the tariff on Chinese goods by 100%, Trump said the levy was “not sustainable,” though “it could stand.” The US will “be fine” with China, he added.
Bessent also said he spoke virtually with He on Friday evening. The Treasury chief earlier described the discussions with He as “frank and detailed” and reaffirmed plans to meet in-person next week.
Bessent’s comments came after Trump expressed optimism that talks with Chinese officials may yield an agreement to defuse the crisis that saw the US leader threaten to drastically hike tariffs. All told, the remarks signaled an effort by Washington to calm fears of a full-blown trade war with Beijing that could have a seismic effect on the global economy.
“There’s a prevailing belief that US–China trade headlines will remain skewed toward a positive outcome,” Chris Weston, head of research at Pepperstone Group, wrote in a note to clients.
From the delayed US inflation report for September, to a high-level party meeting in China and a busy week of earnings — including Netflix Inc. and Tesla Inc. — it’s a packed week for investors. September’s consumer price index, originally set for Oct. 15, will now come on Friday.
In China, political leaders will begin gathering in Beijing for a four-day meeting, known as its Fourth Plenum, with traders watching for fresh measures to extend China’s strongest equity rally in eight years and shore up the yuan.
While a detailed plan will only be released in March next year, investors will scrutinize the post-meeting readout for any policy signals ahead of the possible meeting between Chinese President Xi Jinping and Trump.
In geopolitical news, Israel launched strikes against Hamas in Gaza and reportedly suspended all aid shipments on Sunday after blaming Hamas for a lethal Palestinian ambush that left two soldiers dead.
Elsewhere, French bond futures opened lower after S&P Global Ratings downgraded France to A+ from AA-, saying the country’s budget uncertainty was “elevated.” France has now lost its double-A rating at two of the three major credit assessors in little more than a month, potentially forcing some funds with ultra-strict investment criteria to sell the country’s bonds.
Corporate News:
Kering SA agreed to sell its beauty division to L’Oreal SA as part of a long-term strategic alliance, with Chief Executive Luca de Meo seeking to turn around the French luxury giant’s fortunes. Sany Heavy Industry Co. started taking investor orders to raise as much as HK$12.4 billion ($1.6 billion) in a Hong Kong listing, joining a flood of Chinese companies seeking to capitalize on the Asian financial hub’s hot market. Some of the main moves in markets:
Stocks
S&P 500 futures rose 0.2% as of 11:58 a.m. Tokyo time Japan’s Topix rose 2% Australia’s S&P/ASX 200 rose 0.2% Hong Kong’s Hang Seng rose 2.4% The Shanghai Composite rose 0.6% Euro Stoxx 50 futures rose 0.7% Currencies
The Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1665 The Japanese yen fell 0.2% to 150.86 per dollar The offshore yuan was little changed at 7.1255 per dollar Cryptocurrencies
Bitcoin was little changed at $108,820.36 Ether fell 1.1% to $3,959.14 Bonds
The yield on 10-year Treasuries was little changed at 4.01% Japan’s 10-year yield advanced 3.5 basis points to 1.655% Australia’s 10-year yield advanced five basis points to 4.15% Commodities
West Texas Intermediate crude fell 0.3% to $57.37 a barrel Spot gold was little changed This story was produced with the assistance of Bloomberg Automation.
–With assistance from Matthew Burgess.
©2025 Bloomberg L.P.
