Asia: Equities rally on China-US hopes, new Japanese PM lifts Tokyo
STOCKS extended gains on Tuesday on further signs that China-US trade tensions were easing, with Tokyo hitting another record as Japan prepares to swear in a new prime minister and bring an end to a period of political uncertainty.
Investors were back in a buying mood after last week’s ructions caused by Donald Trump’s threat earlier in the month to hammer China with 100 per cent tariffs over its latest rare earth export controls.
The US president - who had lashed Beijing’s “extraordinarily aggressive” moves - has since toned down his rhetoric and on Monday expressed optimism ahead of a meeting with Chinese counterpart Xi Jinping at the Apec summit in South Korea.
He said he was focused on getting a “fair” trade deal between the superpowers, adding: “I want to be good to China. I love my relationship with President Xi. We have a great relationship.”
He also said he doubted China would invade Taiwan, saying “I think we’ll be just fine with China. China doesn’t want to do that.”
The remarks, which followed other conciliatory words at the weekend, helped push Wall Street higher, as the tech-led rally that has pushed markets to records got back on track.
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“Markets are travelling on ‘high hopes’ for a thaw in US-China relations, with President Trump listing rare earths, fentanyl and soybeans as top issues ahead of trade talks,” said National Australia Bank’s Rodrigo Catril.
Hong Kong jumped more than one per cent, with Shanghai, Singapore, Sydney, Seoul, Taipei, Manila and Jakarta also well in positive territory.
Tokyo climbed more than one per cent to a new high, following Monday’s 3.4 per cent surge, as Japan was set to get its first woman prime minister after Sanae Takaichi reached a deal to form a new coalition.
The agreement eased worries about political strife in the country after the Komeito party withdrew from its long-standing alliance with Takaichi’s Liberal Democratic Party soon after her election.
Markets have been cheered by the prospect of her premiership as she has in the past backed aggressive monetary easing and expanded government spending, echoing her mentor, former premier Shinzo Abe.
Traders are also keeping tabs on Beijing, where China’s leaders are holding a four-day conclave expected to discuss strategies to address sluggish household spending and persisting woes in the vast property sector.
The gathering comes after data on Monday showed growth in the world’s number two economy came as expected for the third quarter, but was the slowest in a year.
In company news, mineral producers rallied in Sydney following a deal between Trump and Australian Prime Minister Anthony Albanese to ramp up shipments of rare earths to the United States.
Hastings Technology Metals jumped almost four per cent, Lynas Rare Earths rallied close to five per cent and Iluka Resources piled on more than nine per cent. AFP
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