Asia markets edge lower as investors eye central bank rulings despite Wall Street's tech rally

[stock market data]

Asia stocks trade in red on Tuesday, that contrasted sharply with the performance of Wall Street, where major indexes notched record highs overnight. That surge was primarily led by strong gains in the technology sector, providing a positive, though ultimately limited, uplift to global sentiment.

The modest pullback came as traders digested fresh developments in U.S. diplomacy across the region and, more significantly, awaited a series of key central bank decisions scheduled for later this week.

Gold prices fell to a more than two-week low at around $3,960 per ounce on Tuesday, as prospects of a US-China trade deal dented safe-haven demand.

South Korea’s economy grew 1.2% quarter-on-quarter in the three months to September 2025, marking the fastest pace in 1-½-years, on strong exports and solid private consumption.

Japan (NKY:IND [https://seekingalpha.com/symbol/NKY:IND]) fell 0.72% to around 50,200 while the broader Topix Index lost 1% to 3,292 on Tuesday, with Japanese stocks pulling back from record highs. The Japanese yen [https://seekingalpha.com/symbol/USD:JPY#hasComeFromMpArticle=false#source=section%3Amain_content%7Cbutton%3Abody_link%7Cfirst_level_url%3Anews] appreciated past 152 per dollar on Tuesday, rebounding from near eight-month lows.

U.S. President Donald Trump and Japanese Prime Minister Sanae Takaichi signed a framework agreement on Tuesday to secure supplies of critical minerals and rare earths through mining and processing, the White House said.

Meanwhile, Japan’s new economic revitalization minister, Minoru Kiuchi, said the government’s priority is to accelerate growth, underscoring Takaichi’s commitment to expansionary fiscal policy.

China (SHCOMP [https://seekingalpha.com/symbol/SHCOMP]) fell 0.02% to around 3,990 while the Shenzhen Component edged down 0.1% to 13,476 on Tuesday, and the offshore yuan [https://seekingalpha.com/symbol/USD:CNY#source=url_first_level%3Amarket-news%7Csection%3Aglobal%7Csection_asset%3Afull_story%7Cbutton%3Abody_link] climbed to around 7.09 per dollar on Tuesday, marking its strongest level in a year, boosted by firmer central bank guidance and optimism ahead of a key meeting between Chinese and US leaders later this week.

On the trade front, President Donald Trump and Chinese President Xi Jinping are expected to finalize a potential trade deal in their upcoming meeting this week that covers a wide range of issues including rare earth minerals, soybean purchases and TikTok.

The Southeast Asian bloc ASEAN and China on Tuesday signed an upgrade to their free trade agreement, expected to cover digital trade, the green economy, and other emerging industries, as Reuters reported.

On Tuesday, the People’s Bank of China will resume buying and selling treasury bonds on the open market, Governor Pan Gongsheng said on Monday, according to Xinhua Caijing. “At present, the overall bond market is operating well.” Pan also reaffirmed that the board will “maintain its supportive monetary policy stance and implement moderately loose monetary measures.”

China on Monday unveiled a plan to streamline the qualified foreign investor regime by easing access requirements, improving efficiency, and expanding investment options to attract more long-term foreign capital.

The EU is set to hold talks with a Chinese delegation in Brussels this week over Beijing’s new restrictions on rare-earth exports, as Europe moves to safeguard its industrial base.

Markets also await upcoming PMI releases, with official data expected this week and private surveys due next week.

Hong Kong (HSI [https://seekingalpha.com/symbol/HSI]) fell 0.11% to 26,386 in early trading on Tuesday, ending a three-day winning streak amid a pullback mainly in consumer stocks.

On the trade front, Hong Kong’s exports jumped 16.1% yoy in September, the fastest pace since March, while imports rose 13.6%, both reaching their highest levels in nearly four years.

India (SENSEX [https://seekingalpha.com/symbol/SENSEX]) fell 0.43% to 84,509 in morning trade on Tuesday, as traders booked profits after gains in the previous session. Consumer goods, financial services, banking, and tech stocks mainly weighed on the broader index.

India is planning to allow direct foreign investment in state-run banks of up to 49%, more than double the current limit, a person directly involved in the policy discussions told Reuters.

Australia (AS51 [https://seekingalpha.com/symbol/AS51]) fell 0.48% to 9,018 on Tuesday, reversing gains from the previous session as investors scaled back expectations of an interest rate cut next week.The Australian dollar [https://seekingalpha.com/symbol/AUD:USD#hasComeFromMpArticle=false#source=section%3Amain_content%7Cbutton%3Abody_link%7Cfirst_level_url%3Anews] rose to around $0.656 on Tuesday, reaching its highest level in nearly three weeks, as a softer US dollar provided support.

Reserve Bank of Australia Governor Michele Bullock cautioned that a sudden reversal in global market optimism could trigger financial instability and hasten interest rate cuts.

In the U.S. on Monday, all three major indexes ended all-time high [https://seekingalpha.com/news/4508646-stock-market-news-sp500-nasdaq-composite-dow-jones] after Treasury Secretary Scott Bessent said a "very successful framework" exists for Presidents Trump and Xi to discuss this week.

U.S. stock futures inched up on Tuesday after Wall Street rallied to new record highs: Dow +0.01%; S&P 500 -0.06%; Nasdaq -0.04%.

On the corporate side, Amazon said it will begin layoffs on Tuesday, marking the largest job cuts in the company’s history.

Highly-anticipated earnings reports this week include Apple, Amazon, Alphabet, Meta and Microsoft.

Passenger car registrations in the European Union rose 10.0% year-on-year to 888,672 units in September 2025, following a 5.3% increase in August.

CURRENCIES: (JPY:USD [https://seekingalpha.com/symbol/JPY:USD]), (CNY:USD [https://seekingalpha.com/symbol/CNY:USD]), (AUD:USD [https://seekingalpha.com/symbol/AUD:USD]), (INR:USD [https://seekingalpha.com/symbol/INR:USD]), (HKD:USD [https://seekingalpha.com/symbol/HKD:USD]), (NZD:USD [https://seekingalpha.com/symbol/NZD:USD]).

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