Asia stocks rise on China data, trade talks; Nikkei hits record highs on Takaichi bet

[stock market data]

Asia stocks trade higher on Monday, driven by a split between political optimism in Japan and economic data in China. Japanese shares soared to a new record as investors bet on Sanae Takaichi securing the premiership, anticipating her 'fiscal dove' policies. Concurrently, China's markets advanced on the back of mildly positive economic growth figures.

Markets also took note of easing Sino-US trade tensions, after US President Trump called his proposed tariffs on Chinese goods "not sustainable" as officials prepare for upcoming bilateral talks.

Gold prices steadied at $4,250 per ounce on Monday after a sharp decline on Friday, with investors closely monitoring upcoming talks between the US and China.

The annual inflation rate in New Zealand increased to 3% in the third quarter of 2025, the highest since the second quarter of 2024, from 2.7% in the previous period and in line with forecasts.

Japan (NKY:IND [https://seekingalpha.com/symbol/NKY:IND]) rose 3.03% to above 48,500 while the Topix Index climbed 1.2% to 3,210 on Monday, rebounding from the prior session’s losses. The Japanese yen [https://seekingalpha.com/symbol/USD:JPY#hasComeFromMpArticle=false#source=section%3Amain_content%7Cbutton%3Abody_link%7Cfirst_level_url%3Anews] weakened toward 151 per dollar on Monday, extending losses from the prior session, as investors prepared for Japan’s leadership vote on Tuesday.

Bank of Japan policy board member Hajime Takata renewed his call for an interest rate hike, citing eased tariff concerns and progress toward the central bank’s inflation target.

Sanae Takaichi is poised to become Japan’s first female prime minister after the right-wing Japan Innovation Party, Ishin, signaled its support, Reuters reported Monday. The parliamentary vote to choose Japan’s next leader will be held on October 21.

China (SHCOMP [https://seekingalpha.com/symbol/SHCOMP]) rose 0.53% to around 3,860 while the Shenzhen Component rallied 1.5% to 12,880 on Monday, recouping some losses from the previous session amid signs of easing Sino-US trade tensions, 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] traded flat around 7.12 per dollar on Monday, holding near three-week highs as investors assessed a raft of fresh Chinese economic data.

China's economy delivered a mixed performance in the third quarter of 2025 [https://seekingalpha.com/news/4505470-chinas-11-q3-gdp-beats-forecasts-on-policy-boost-but-trade-war-looms]. On an annual basis, GDP growth eased to 4.8% from 5.2% in Q2, marking the slowest Y/Y pace since the third quarter of 2024. Despite the slower annual pace, the economy demonstrated surprising short-term strength, expanding by 1.1% on Q/Q basis

SEPARATE SEPTEMBER ACTIVITY DATA, which were also released on Monday, showed industrial output rose to 6.5% year-on-year [https://seekingalpha.com/news/4505473-chinas-industrial-output-surges-65-consumer-spending-slows-to-1-year-low-jobless-rate-falls-to-52-in-september], accelerating from a 5.2% increase in August and beating a forecast of 5.0%. Retail sales growth slowed to 3.0% in September, from 3.4% in August, marginally higher than forecast of 2.9%.

China’s surveyed unemployment rate fell to 5.2% in September 2025, compared to market expectations and August’s six-month high of 5.3%.

On the monetary policy front, the People’s Bank of China kept its benchmark lending rates unchanged [https://seekingalpha.com/news/4505472-pboc-holds-key-lending-rates-steady-for-fifth-straight-month] for a fifth consecutive month, as widely expected, maintaining the one-year and five-year loan prime rates.

China’s rare earth magnet exports fell 6.1% M/M to 5,774 metric tons in September 2025, ending three months of gains ahead of the government’s October expansion of export controls targeting users in the defense and semiconductor sectors.

China imported no soybeans from the U.S. in September 2025 — the first time since November 2018 — as trade tensions between the world’s two largest economies deepened.

Ahead of renewed trade talks, President Trump stated that rare earths, fentanyl, and soybeans are the main U.S. negotiation priorities with China. Trump specifically warned Beijing against using rare earths as a bargaining chip, telling reporters: "I don't want them to play the rare earth game with us." This follows his recent threat of 100% tariffs if China tightens controls on the critical minerals.

Hong Kong (HSI [https://seekingalpha.com/symbol/HSI]) rose 2.39% to 25,885 around noon on Monday, rebounding sharply from a 2.5% drop in the prior session amid widespread gains across all sectors.

India (SENSEX [https://seekingalpha.com/symbol/SENSEX]) rose 0.71% to 84,423 in morning trade on Monday, gaining for the fourth straight session, mainly supported by tech and banking stocks. The Indian rupee was little changed to marginally higher around 88 per USD, hovering near a one-month-high.

India is making “solid progress” in trade talks with the U.S. aimed at securing a trade deal and reducing punitive tariffs, Bloomberg News reported Sunday.

Australia (AS51 [https://seekingalpha.com/symbol/AS51]) rose 0.41% to 8,976 on Monday, paring gains from last week, weighed down by sharp declines in the gold and other mining stocks. The Australian dollar [https://seekingalpha.com/symbol/AUD:USD#hasComeFromMpArticle=false#source=section%3Amain_content%7Cbutton%3Abody_link%7Cfirst_level_url%3Anews] strengthened to around $0.650 on Monday, extending gains from the previous session, amid optimism over a potential breakthrough in US-Australia trade talks.

In the U.S. on Friday, all three major indexes ended higher [https://seekingalpha.com/news/4505251-sp500-nasdaq-composite-dow-jones-today-stock-market-news] as investors reacted positively to President Trump’s remarks easing fears of further trade escalation with China, while regional bank stocks rebounded following Thursday’s steep losses.

U.S. stock futures higher on Monday after President Trump suggested tariffs on China could be cut if Beijing took steps benefiting the U.S.: Dow +0.29%; S&P 500 +0.40%; Nasdaq +0.54%.

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]).

MORE ON ASIA:

China's Q3 GDP 4.8% Y/Y, hits slowest pace since 2024, but beats quarterly expectations [https://seekingalpha.com/news/4505470-chinas-11-q3-gdp-beats-forecasts-on-policy-boost-but-trade-war-looms#source=url_first_level%3Amarket-news%7Csection%3Amarket-pulse%7Csection_asset%3Anews_title]

PBoC holds key lending rates steady for fifth straight month [https://seekingalpha.com/news/4505472-pboc-holds-key-lending-rates-steady-for-fifth-straight-month#source=url_first_level%3Amarket-news%7Csection%3Amarket-pulse%7Csection_asset%3Anews_title]

China's industrial output surges 6.5%, consumer spending slows to 1-year low; jobless rate falls to 5.2% in September [https://seekingalpha.com/news/4505473-chinas-industrial-output-surges-65-consumer-spending-slows-to-1-year-low-jobless-rate-falls-to-52-in-september#source=url_first_level%3Amarket-news%7Csection%3Amarket-pulse%7Csection_asset%3Anews_title]

Australia jobless rate rises to 4.5% in Sept; employment growth misses estimates [https://seekingalpha.com/news/4504616-australia-jobless-rate-rises-to-45-in-sept-employment-growth-misses-estimates#source=url_first_level%3Amarket-news%7Csection%3Amarket-pulse%7Csection_asset%3Anews_title]

China CPI falls beyond forecast amid steeper food price; PPI deflation continues for 36th month [https://seekingalpha.com/news/4504126-china-cpi-falls-beyond-forecast-amid-steeper-food-price-ppi-deflation-continues-for-36th-month#source=url_first_level%3Amarket-news%7Csection%3Amarket-pulse%7Csection_asset%3Anews_title]