Asia report: Most markets rise on fresh trade optimism
By Josh White
Date: Thursday 24 Jul 2025
(Sharecast News) - Asia-Pacific stocks advanced on Wednesday, buoyed by growing optimism over trade negotiations between the United States and key partners, particularly Japan and the European Union.
The gains followed a strong overnight performance on Wall Street, where the S&P 500 rose 0.78% to close at a record high of 6,358.91.
"Asian equities caught another updraft, rising for a sixth straight session, as whispers of broader trade accords scattered across the tape like migrating birds sensing the storm has passed. With the ink barely dry on the US-Japan tariff truce - inked at a palatable 15% - traders are already scanning the horizon for the next deal to surface," commented Stephen Innes at SPI Asset Management.
"Europe? Maybe. India? China? Everyone? Perhaps. But the mood is pure Electric Avenue.
"The MSCI Asia Pacific index notched a 0.7% gain, its longest winning streak since January, while Japanese bourses jumped out of the gate like thoroughbreds chasing clean air."
Innes added that while equities drifted higher "like a helium balloon on a windless day", something beneath the surface was "starting to hum".
"Alphabet floated higher after-hours on a revenue beat, but Tesla hit turbulence as Elon warned of 'a few rough quarters' - not quite a mayday call, but enough to rattle the cockpit.
"Meanwhile, SK Hynix offered a reminder that in the chip race, it's not always the loudest that lead - sometimes it's the ones quietly beating expectations.
"Still, the dollar remains the odd passenger - slumping when it should be rising."
A 15% tariff regime replacing a feared 25% to 30% should be bullish, Innes said, especially with US risk assets "running hot" and Treasury yields higher.
"In other words, stocks up and bond yields up should be bullish for the dollar.
"Yet, the greenback is being treated like baggage - dragged along but barely lifting its head. Why?"
Most markets rise on fresh trade optimism
Japan led regional gains, with the Nikkei 225 climbing 1.66% to finish at 41,855.00 and the Topix reaching a record high of 2,977.55, up 1.75%.
Shares of Furukawa Electric surged 7.24%, while Japan Steel Works and Resona Holdings added 6.74% and 6.36% respectively.
Mainland Chinese markets also closed higher - the Shanghai Composite rose 0.65% to 3,605.73, while the Shenzhen Component added 1.21% to 11,193.06.
Gains were led by Harbin Xinguang Optic Electronics, up 13.07%, and Hainan Airlines, which jumped 10.14%.
In Hong Kong, the Hang Seng Index rose 0.51% to 25,667.18.
Solar and industrial stocks led the advance, with Xinyi Solar climbing 7.92% and China Hongqiao Group up 6.28%.
South Korea's Kospi 100 ended nearly flat, up just 0.01% at 3,212.11.
Gains in LG Energy Solution, which rose 9.36%, and SKC, up 7.71%, helped offset broader market softness.
In Australia, the S&P/ASX 200 fell 0.32% to 8,709.40, weighed down by a 28.38% slump in Bapcor following a profit warning.
Macquarie Group and Westgold Resources also declined by more than 4% each.
Across the Tasman Sea, New Zealand's S&P/NZX 50 inched up 0.09% to 12,805.13, supported by tourism and healthcare names.
Tourism Holdings gained 2.91% and EBOS Group rose 2.46%.
In currencies, the dollar was last up 0.05% on the yen, trading at JPY 146.58, as it weakened 0.2% against the Aussie to AUD 1.5116, and retreated 0.07% from the Kiwi, changing hands at NZD 1.6528.
Oil prices firmed, with Brent crude futures last up 1.14% on ICE to $69.29 per barrel, and the NYMEX quote for West Texas Intermediate rising 1.26% to $66.07.
Japan factory activity contracts, Australia picks up momentum
In economic news, Japan's factory activity contracted in July as concerns over US trade policy weighed on sentiment, while its services sector continued to expand, underscoring a widening gap in the economy's performance.
The S&P Global Japan manufacturing purchasing managers' index (PMI) fell to 48.8 in July from 50.1 in June, marking a return to contraction territory.
Output and new orders declined at the fastest pace in several months, reflecting business unease following US president Donald Trump's announcement of a trade deal that includes a 15% tariff on Japanese imports and pledges of $550bn in Japanese investment into the US.
Despite weakness in manufacturing, Japan's services PMI rose to 53.5 from 51.7, the strongest pace of growth in five months, supported by solid domestic demand.
However, new export business fell for the first time in seven months, and employment growth slowed to a near two-year low.
As a result, the composite PMI remained unchanged at 51.5 in July.
In Australia, business activity picked up momentum in July, driven by stronger growth in both services and manufacturing.
The S&P Global composite PMI rose to 53.6 from 51.6 in June, with the services index climbing to 53.8, while manufacturing improved to 51.6.
While S&P described the acceleration in activity as "hastened", it also noted warning signs.
Business confidence dipped to an eight-month low, hiring slowed, and input price pressures intensified, raising fresh concerns over inflation and interest rate prospects.
South Korea's economy outperformed expectations in the second quarter, avoiding a technical recession.
GDP grew 0.6% from the prior quarter, ahead of the 0.5% forecast and a rebound from a 0.2% contraction in the first three months of the year.
On an annual basis, the economy expanded 0.5%, compared to zero growth in the prior quarter.
The recovery was driven by a 0.7% increase in total consumption, up sharply from a 0.1% decline earlier in the year.
Meanwhile, China unveiled a rare form of direct fiscal support to address the needs of its aging population and stimulate domestic consumption.
Authorities said they would issue monthly electronic subsidy coupons to seniors, covering part of their elderly care service costs.
The move marked a shift from Beijing's usual reluctance to offer direct cash handouts, as officials stepped up efforts to boost social welfare and shore up consumer demand amid broader economic headwinds.
Reporting by Josh White for Sharecast.com.
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