FX.co ★ Japanese Shares Rally on US-China Trade Deal Hopes

On Monday, the Nikkei 225 Index surged 2.1% to surpass 50,000, while the broader Topix Index advanced 1.6% to reach 3,322, setting fresh all-time highs for both indices. This rally was fueled by optimism that the United States and China are close to finalizing a trade agreement ahead of the Trump-Xi meeting slated for Thursday in South Korea. Trade representatives from both nations indicated they had reached agreements on critical issues such as export controls, fentanyl regulations, and shipping tariffs following fruitful discussions over the weekend in Malaysia. Additionally, investors braced for a potential interest rate cut by the Federal Reserve this week, spurred by weaker US inflation data, while the Bank of Japan is anticipated to maintain its existing monetary policy. Gains were widespread across the market, with significant advances observed in major stocks like SoftBank Group (up 2.6%), Advantest (up 5%), Mitsubishi Heavy (up 2.6%), Kawasaki Heavy (up 8%), and IHI Corp (up 2.9%).