Asia markets mostly rise on U.S. trade optimism, Nikkei hits 1-yr high; U.S. futures advance as major indices reach new all-time highs

Asia stock markets mostly higher on Monday, following gains on Wall Street, where major U.S. indexes hit new record highs amid easing tariff risks and receding geopolitical tensions, the investors risk appetite was also boosted by developments in the U.S.-Canada trade standoff. On the geopolitical front, the ceasefire between Israel and Iran appears to be holding, easing global tensions and dampening safe-haven demand for the dollar. Gold rose to around $3,280 per ounce on Monday, helped by a weaker US dollar. Japan ( NKY:IND ) rose 0.88% to surpass 40,700, while the broader Topix Index rose 0.8% to 2,863 on Monday, with both benchmarks reaching their highest levels in nearly a year. The Japanese yen strengthened toward 144 per dollar on Monday, approaching two-week highs. Meanwhile, data showed Japan’s industrial production rose less than expected in May, as elevated US tariffs continued to dampen the outlook. However, trade friction between Japan and the US remains unresolved, as the 25% US tariff on Japanese car imports continues to be a sticking point in bilateral negotiations, with little sign of progress. Japan’s housing starts plunged 34.4% year-over-year in May 2025, sharply missing market expectations of a 14.8% drop and worsening from a 26.6% decline in the previous month. Looking ahead, investors are turning their attention to Tuesday’s Tankan survey for a clearer read on corporate sentiment and the broader economic environment. China ( SHCOMP ) rose 0.42% rose 0.2% to around 3,430 on Monday, snapping a two-day losing streak, as weak manufacturing data fueled expectations of additional stimulus, and the offshore yuan strengthened to around 7.16 per dollar on Monday, recouping losses from the previous week, as the latest PMI data reinforced expectations of further stimulus measures. Official data showed China’s manufacturing PMI edged up to 49.7 in June from 49.5 but remained in contraction for a third straight month. The non-manufacturing PMI also rose slightly to 50.5, indicating tepid growth in services and construction. Beijing confirmed Friday a new trade agreement with Washington. The deal stipulates China will review export applications under its control rules, in exchange for the U.S. rolling back several restrictive measures targeting Chinese entities. Markets now await Tuesday’s Caixin PMI data for further insight into private-sector momentum. Hong Kong ( HSI ) fell 0.26% to 24,183 in Monday morning trade, extending losses for a third straight session amid broad weakness in consumer and financial stocks. India ( SENSEX ) fell 0.34% to 83,797 in early trade on Monday, erasing solid gains from the prior session, as traders engaged in profit-taking after the BSE Sensex hit a record high on Friday. On the data front, India’s external debt reached a record high of USD 736.3 billion in the March quarter, primarily driven by an increase in non-government debt. Australia ( AS51 ) rose 0.53% to 8,534 on Monday, extending last week’s gains as investor sentiment improved amid easing concerns over broad US tariffs. The Australian dollar edged higher to around $0.653 on Monday. Domestically, the Melbourne Institute’s Monthly Inflation Gauge showed a modest uptick in June, reversing the previous month’s decline and marking the fourth increase this year. Australia’s private sector credit edged lower to 0.5% month-over-month in May 2025, compared to market expectations and the prior month’s 0.7%. Investors now await Australia’s June manufacturing PMI for insights into the health of the sector and the country’s overall economic momentum. In the U.S., on Friday, all three major indexes ended higher amid optimism for trade deals and rate cut hopes, overshadowing Trump’s Canada trade talk comments. On the economic front, investors are closely watching key US labor market indicators this week, including job openings data, the ADP employment report, and the non-farm payrolls report, which could provide further insights into the Federal Reserve’s rate path. U.S. stock futures rose on Monday as Wall Street aimed to close out a strong June, with both the S&P 500 and Nasdaq Composite hitting new all-time highs: Dow +0.57% ; S&P 500 +0.39% ; Nasdaq +0.55% . Currencies: ( JPY:USD ), ( CNY:USD ), ( AUD:USD ), ( INR:USD ), ( HKD:USD ), ( NZD:USD ). More on Asia: Japan’s industrial production rise less than expected in May China’s manufacturing PMI contracts for third consecutive month in June to 49.7; services growth at 3-month peak Japan’s retail sales up 2.2% in May, least in 3 months; unemployment stalls at 2.5% China’s industrial profits fall 9.1% Y/Y in May; fall slightly in Jan-May BoJ minutes reveal ongoing caution on economy amid inflation & market risks

Source: Seeking Alpha