Asia stocks surge on easing US-China tensions; Takaichi PM prospects fuel Japan rally

[Display of Stock market quotes with city scene reflect on glass]
Nikada

Asia markets higher on Tuesday as sentiment strengthened after a rally on Wall Street overnight, from easing U.S.-China trade tensions. The risk-on mood was established overnight by a robust finish on Wall Street, where concerns over U.S. regional banks eased and strong corporate earnings reports fueled buying.

Meanwhile, Japanese shares hit new record highs amid expectations that Sanae Takaichi would become the next Prime Minister, signaling continued fiscal stimulus.

Gold dipped to around $4,340 per ounce on Tuesday but remained close to the fresh record set in the previous session.

Japan (NKY:IND [https://seekingalpha.com/symbol/NKY:IND]) rose 0.67% to above 49,600, while the broader Topix Index gained 0.5% to 3,265 on Tuesday. 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 Tuesday, falling for the third straight session, as investors awaited a parliamentary vote expected to confirm Sanae Takaichi as Japan’s next prime minister.

Sanae Takaichi won the lower house vote on Tuesday, officially becoming Japan’s first female prime minister.

China (SHCOMP [https://seekingalpha.com/symbol/SHCOMP]) rose 1.24% to above 3,880 while the Shenzhen Component gained 1.2% to 12,980 on Tuesday, with mainland stocks rising for the second straight session as easing Sino-US trade tensions continued to support market sentiment, 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] inched up around 7.12 per dollar on Tuesday, nearing a four-week-high, supported by continued firm central bank guidance and signs of easing US-China trade tensions.

Adding to the upbeat mood, President Donald Trump said he expects to reach a “fair deal” with China’s President Xi Jinping during their upcoming meeting in South Korea, tempering trade tensions.

Meanwhile, Foxconn Industrial jumped 4% after Apple announced strong iPhone 17 sales in both the US and China. Foxconn is a major manufacturing partner for Apple.

Hong Kong (HSI [https://seekingalpha.com/symbol/HSI]) rose 1.65% to 26,233 on Tuesday morning, extending strong gains from the prior session and nearing its highest in almost a month.

India (SENSEX [https://seekingalpha.com/symbol/SENSEX]) market closed. India's net foreign direct investment turned negative in August 2025, marking the first time in the current fiscal year (2025/26), due to a moderation in gross inflows and a rise in repatriation.

Australia (AS51 [https://seekingalpha.com/symbol/AS51]) rose 0.70% to 9,093 on Tuesday, extending gains from the previous session, as market sentiment remained buoyant amid progress on a key US-Australia trade agreement. The Australian dollar [https://seekingalpha.com/symbol/AUD:USD#hasComeFromMpArticle=false#source=section%3Amain_content%7Cbutton%3Abody_link%7Cfirst_level_url%3Anews] slipped to around $0.650 on Tuesday, breaking a two-day winning streak.

U.S. President Donald Trump and Australian Prime Minister Anthony Albanese signed a USD 8.5 billion critical-minerals deal at the White House on Monday, aiming to secure access to Australia’s rich rare-earth resources as China tightens export rules.

Domestically, investors now await flash PMI data, alongside speeches from RBA officials later this week.

In the U.S. on Monday, all three major indexes ended higher [https://seekingalpha.com/news/4505608-wall-street-dow-sp500-nasdaq] on optimism over incoming earnings reports and fresh support from banks, while markets continued to assess the outlook of fewer trade barriers between the US and China.

Investors now await Friday’s September CPI report for further insight, which was delayed due to the shutdown.

U.S. stock futures were little changed on Tuesday as investors awaited a wave of major earnings reports, with Netflix, Coca-Cola, and General Motors set to release results later in the day: Dow +0.04%; S&P 500 +0.04%; Nasdaq +0.02%.

Later this week, attention will turn to earnings from Tesla, Intel, and Procter & Gamble.

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]