Asian Stocks Surge on Trade Optimism: What Investors and Businesses Need to Know as Nikkei Nears Record High
SINGAPORE: Asian stocks continued their upward momentum on Thursday, buoyed by optimism stemming from recent trade agreements and strong corporate earnings on Wall Street, which boosted investor confidence across the region. Meanwhile, the euro remained steady ahead of the European Central Bank’s upcoming policy meeting.
The MSCI Asia-Pacific index, excluding Japan, rose by 0.4%, reaching a near four-year high following US stocks closing at record levels the previous day. Positive sentiment is expected to persist into European markets, with pan-European futures climbing 1.17%, German DAX futures up 1.15%, and FTSE futures gaining 0.39%.
Japan’s Topix and Singapore’s benchmark index surpassed previous highs, while the Nikkei 225 extended its gains from Wednesday, approaching the record peak set last year.
Investor speculation grew around a potential US-European Union trade deal, following the Trump administration’s recent agreements with Japan, the Philippines, and Indonesia. Gavin Friend, senior market strategist at NAB, noted, “There’s nothing like a trade deal with a major trading partner—and with deals now in place with the Philippines and Indonesia, plus the possibility of one with Europe—for markets to shed their caution.” He added, “Yields are higher and the outlook is optimistic.”
Market activity was somewhat muted after the White House announced US President Donald Trump’s surprise visit to the Federal Reserve, a move heightening tensions between the administration and Fed Chair Jerome Powell. The Federal Reserve is expected to maintain current interest rates at its upcoming meeting.
Vasu Menon, managing director of investment strategy at OCBC, commented, “The purpose of Trump’s visit to the Fed is unclear but it may be intended to pressure Powell and the Fed to cut rates, coming just days before the policy meeting.”
The dollar declined 0.31% against the yen, trading at 146.03, though it remained above its April low of 139.89. The euro was last valued at $1.1774, having reached a two-week high earlier in the session.
US markets posted strong performance Wednesday, with the Dow Jones Industrial Average rising more than 1%, the S&P 500 increasing over 0.75%, and the Nasdaq gaining approximately 0.6%.
Gold prices fell slightly as easing trade tensions lowered demand for safe-haven assets, outweighing support from a weaker dollar. Spot gold traded at $3,382.79 per ounce. — Reuters
Special Analysis by Omanet | Navigate Oman’s Market
The wave of optimism driven by improving US trade agreements and strengthened Asian markets signals growing global economic stability, creating opportunities for Omani businesses to expand export links and attract foreign investment. However, potential pressure on US interest rates and currency fluctuations pose risks that investors should monitor closely to safeguard portfolios. Smart entrepreneurs should leverage this momentum by exploring partnerships within emerging trade corridors and diversifying to stay agile amid evolving global dynamics.
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