Asia report: Markets rise on renewed US-China trade optimism
By Josh White
Date: Monday 09 Jun 2025
(Sharecast News) - Equities across the Asia-Pacific region closed mostly higher on Monday, as investors digested key inflation and trade figures from China and looked ahead to talks between Beijing and Washington later in the day.
Market sentiment was lifted by reports that China had granted temporary export approvals for rare earths and resumed commercial airliner deliveries from Boeing, signalling a potential thaw in trade tensions.
"Asian stocks are lining up for a cautious climb on Monday, surfing the tailwinds of Friday's US jobs report, which landed like a well-timed gust beneath the wings of risk sentiment," said SPI Asset Management managing partner Stephen Innes.
"The headline payroll print didn't just ease recession angst - it offered enough macro comfort food to keep the rally wagon narrative alive.
"But the real action this week isn't in the numbers. It's in London, where Trump's trade troika is locking horns - or perhaps shaking hands - with Beijing's emissaries in a reboot of bilateral talks."
Innes said it was "not your typical" trade theatre.
"Forget the pomp of Mar-a-Lago photo ops - this is trench diplomacy in Savile Row suits, with both sides recognizing that the clock is ticking.
"Trump needs market serenity to maintain the illusion of economic strength heading into the Summer.
"At the same time, Xi navigates a domestic economy riddled with landmines in the property sector and a consumer base still struggling to recover from the pandemic."
That, Stephen Innes said, created a mutual incentive to "tone down the tariff tantrums" and cue up the handshake optics, even if no signatures were signed.
Most markets close higher on US-China trade optimism
In Tokyo, the Nikkei 225 rose by 0.92% to close at 38,088.57, with gains led by large-cap names.
Otsuka Holdings jumped by 5.27%, SoftBank Group climbed 4.98%, and chip-testing firm Advantest advanced 4.86%.
The broader Topix index also gained, rising 0.58% to end the session at 2,785.41.
Mainland Chinese markets posted modest gains despite mixed economic data.
The Shanghai Composite added 0.43% to finish at 3,399.77, while the Shenzhen Component rose 0.65% to close at 10,250.14.
Consumer price inflation in China eased in May but declined less than economists had forecast, while the producer price index fell more sharply than expected.
Export growth for the month missed projections, with a notable drop in shipments to the United States.
Nonetheless, individual stocks recorded strong moves, with Jilin Yatai Group up 10.29%, QuMei Home Furnishings Group higher by 10.13%, and Zhejiang Golden Eagle climbing 10.06%.
Hong Kong's Hang Seng Index outperformed regional peers, rallying 1.63% to finish at 24,181.43.
Technology and biotech shares led the gains, with Kuaishou Technology advancing 5.58%, WuXi Biologics up by 5.48%, and semiconductor manufacturer SMIC rising 5.1%.
In South Korea, the Kospi 100 index surged by 1.77% to close at 2,863.47, driven by a sharp rebound in Kakao-linked stocks.
KakaoPay soared by 29.92%, KakaoBank jumped 20.21%, and parent company Kakao Corporation rose 16.03%, marking one of the strongest sessions for the group in recent months.
Australian markets were closed for the King's Birthday public holiday, while in New Zealand the S&P/NZX 50 edged lower by 0.19% to 12,539.26.
The decline was led by Restaurant Brands New Zealand, which fell 2.64%, followed by Investore Property down 1.71% and Fletcher Building losing 1.63%.
In currency markets, the dollar was last down 0.55% on the yen to trade at JPY 144.05, as it declined 0.64% against the Aussie to AUD 1.5310, and dropped 0.85% on the Kiwi to NZD 1.6490.
Crude oil prices were little changed, with Brent crude futures last down 0.05% on ICE to $66.44 per barrel, while the NYMEX quote for West Texas Intermediate dipped 0.05% to $64.55.
China's export growth falls short, consumer prices decline
In economic news, China's export growth fell short of expectations in May, weighed down by a steep decline in shipments to the United States, despite a temporary 90-day suspension of most bilateral tariffs.
Exports rose 4.8% year-on-year in dollar terms, according to customs data released on Monday, missing the 5% growth forecast in a Reuters poll.
The slowdown was driven by a 34.5% plunge in exports to the US - the sharpest drop since February 2020 - while imports from the US also declined by more than 18%.
As a result, China's trade surplus with the US shrank by 41.55% from a year earlier to $18bn.
Overall imports into China dropped 3.4% in May, a much steeper fall than the 0.9% decline expected, as weak domestic demand continued to suppress inbound trade volumes.
Adding to signs of soft consumer activity, China's consumer price index fell for a fourth consecutive month in May.
Prices declined 0.1% from a year earlier, slightly less than the 0.2% drop projected by economists.
The ongoing deflationary trend suggested that Beijing's recent stimulus measures were yet to significantly revive household consumption.
In Japan, the economy contracted at a slower rate than initially estimated in the first quarter of 2025.
Revised figures from the Cabinet Office showed gross domestic product shrank at an annualised pace of 0.2% between January and March, easing from the preliminary reading of a 0.7% decline.
The revision surprised economists, who had expected no change from the initial estimate.
The Bank of Japan, which lowered its full-year growth and inflation forecasts at its 1 May meeting, is scheduled to hold its next policy review over two days next week.
Reporting by Josh White for Sharecast.com.
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