Asian Markets Climb On Japan-US Trade Deal

Asian stock markets posted solid gains on Thursday, led by Tokyo, amid rising optimism over the progress of Japan-US trade negotiations. This positive momentum came despite U.S. Federal Reserve Chair Jerome Powell’s caution that tariffs imposed by President Trump could force policymakers to choose between controlling inflation and maintaining employment.

Investors are closely monitoring developments in Washington over the next three months as global leaders work to prevent the implementation of sweeping tariffs announced by Trump on April 2nd — dubbed “Liberation Day.” Originally set to take immediate effect, the tariffs were delayed for 90 days, giving room for negotiations.

Japan’s talks are especially significant, given that Japanese firms are the largest investors in the United States. Some analysts see Japan’s role as a “canary in the coal mine” for broader trade dynamics. Encouraging signals have already emerged: President Trump took to social media claiming “Big Progress!” while Japan’s envoy Ryosei Akazawa confirmed the U.S. aim to strike a deal within the deadline.

Japan’s Prime Minister Shigeru Ishiba acknowledged the complexity of the talks but emphasized that the U.S. President is prioritizing the negotiations.

The possibility of easing tariffs has helped calm investor nerves following a sharp early-month sell-off driven by fears of a global recession and disrupted trade patterns.

Adding to the global trade landscape, Bloomberg reported that China may consider returning to negotiations—if the U.S. tones down anti-China rhetoric.

Asian markets responded positively:

• Tokyo’s Nikkei 225 rose 1.4% to 34,377.60
• Hong Kong’s Hang Seng Index gained 1.6% to 21,395.14
• Shanghai Composite edged up 0.1% to 3,280.34
• Other markets including Singapore, Mumbai, Seoul, Wellington, Bangkok, and Jakarta also recorded gains, while Taipei, London, Paris, and Frankfurt dipped slightly.

Despite regional gains, volatility remains a concern. Wall Street ended lower, and gold soared to a record $3,357, reflecting ongoing market unease. Powell reiterated that tariffs are likely to cause a temporary—if not persistent—inflation spike, potentially placing the Fed in a difficult balancing act.

“You’ll probably see continued volatility,” Powell warned during an address at the Economic Club of Chicago.

Some investors were disappointed that Powell didn’t hint at a possible interest rate cut in June, despite market indicators pricing in an 80% chance of such a move.

Meanwhile, the World Trade Organization (WTO) issued a stern warning on Wednesday, citing potential long-term damage from the ongoing trade conflict. WTO Director-General Ngozi Okonjo-Iweala noted that China-US trade volumes could drop by as much as 81% if the dispute continues.

Oil prices also climbed, following U.S. sanctions on a second Chinese “teapot” refinery—Shandong Shengxing Chemical—for importing Iranian crude oil. This move aligns with Washington’s continued “maximum pressure” campaign against Tehran.

– Key Market Data at 0810 GMT –

• Tokyo (Nikkei 225): +1.4% at 34,377.60
• Hong Kong (Hang Seng): +1.6% at 21,395.14
• Shanghai (Composite): +0.1% at 3,280.34
• London (FTSE 100): -0.4% at 8,240.16
• Dollar/Yen: 142.79 (up from 142.12)
• Euro/Dollar: $1.1378 (down from $1.1395)
• WTI Crude: +0.9% at $63.03/barrel
• Brent Crude: +0.8% at $66.35/barrel
• Dow Jones (New York): -1.7% at 39,669.39

Asian markets are now bracing for further developments, with investors hoping that diplomatic momentum will translate into lasting economic stability.