A person walks in front of an electronic stock board showing Japan's Nikkei index at a securities firm Monday, Oct. 27, 2025, in Tokyo. (AP Photo)
Asian markets rallied on Monday, led by Japan’s Nikkei 225, which crossed the historic 50,000 mark for the first time. Investors welcomed signs of progress in trade talks involving the United States, China, and several Southeast Asian nations, fueling hopes for easing global trade tensions.
Trade Talks Lift Market Confidence
Optimism spread across the region as U.S. President Donald Trump, on a visit to Malaysia for a regional summit, reached preliminary trade agreements with Malaysia, Thailand, Cambodia, and Vietnam. Discussions between Washington and Beijing also showed promise, with officials from both sides confirming that a framework for a potential U.S.-China trade deal is nearing completion.
“This isn’t just about diplomacy for the cameras,” said Stephen Innes of SPI Asset Management. “Behind the scenes, Washington and Beijing are working on a structure that could help prevent another trade breakdown between the two biggest economies.”
Trump’s next stops include Japan and South Korea, where he is expected to meet Chinese President Xi Jinping during the Asia-Pacific Economic Cooperation (APEC) summit.
Nikkei Hits Record High Under New Leadership
Japan’s markets led the charge, boosted by political stability and renewed investor confidence. The Nikkei 225 surged 2.1% to 50,329.08 — its first-ever close above 50,000. The rally follows the appointment of Prime Minister Sanae Takaichi, Japan’s first female leader, whose pro-market stance has resonated strongly with investors.
Opinion polls show high public support for Takaichi, who has pledged to strengthen Japan’s defense sector. Defense-related stocks soared, with Kawasaki Heavy Industries jumping 8.7%, IHI Corp. gaining 2.6%, and Hitachi up 2.7%.
In a symbolic move to improve trade ties with the U.S., Japan is reportedly considering purchasing Ford F-150 trucks for infrastructure inspections — a gesture seen as a nod to Trump’s long-standing complaints about restricted access for American cars in Japanese markets.
Regional Markets Follow Japan’s Lead
The upbeat sentiment rippled across Asia. South Korea’s Kospi surged 2% to a record 4,018.73, as investors bet on stronger trade cooperation with Washington. In China, Hong Kong’s Hang Seng Index climbed 1% to 26,427.34, and the Shanghai Composite advanced 1% to 3,991.35.
Elsewhere, Australia’s S&P/ASX 200 gained 0.3%, Taiwan’s Taiex rose 2.1%, and India’s Sensex added 0.5%.
A report from the APEC secretariat, however, cautioned that regional growth could slow to 3% this year from 3.6% in 2024 due to lingering trade restrictions and tariffs.
U.S. Markets End Week on Record Highs
The rally in Asia followed strong gains on Wall Street last Friday, as cooling inflation data boosted investor sentiment. The S&P 500 climbed 0.8% to a record 6,791.69, while the Dow Jones Industrial Average rose 1% to 47,207.12. The Nasdaq Composite advanced 1.1% to 23,204.87.
Lower inflation raised hopes that the Federal Reserve might continue easing interest rates to support the job market. The central bank recently cut its benchmark rate for the first time this year but has been cautious about further moves.
Meanwhile, crude oil prices edged higher, with U.S. benchmark crude at $61.65 per barrel and Brent crude at $65.32. The dollar strengthened slightly against the yen, trading at 153.15, while the euro slipped to $1.1622.
