Asian stocks cheer US-Vietnam trade deal; currencies steady
U.S. President Donald Trump said he had sealed a trade deal with Vietnam, under which it would now be hit with a 20% tariff on exports, sharply down from 46% planned earlier.
Vietnamese equities rose 0.6% to their highest level since April 2022, while the dong dropped 0.3% to hit a record low of 26,229 per U.S. dollar.
Analysts at DBS noted the deal could mitigate downside risks to Vietnam's economic growth but added it "may not prevent a slowdown in the coming quarters."
The U.S.-Vietnam deal lifted sentiment across most Asian equities on hopes other countries will strike similar agreements ahead of the July 9 tariff deadline.
The MSCI EM-Asia index advanced 0.2% and touched a three-and-a-half-year high earlier in the day. Philippine stocks climbed 1.1% to log their highest since May 15.
The country faces an 18% tariff under Trump's plan. Shares in Taiwan and Indonesia climbed 0.8% and 0.3%, respectively.
South Korean stocks rose 1% after President Lee Jae Myung said he was working to secure a "mutually beneficial and sustainable" outcome from trade talks with the U.S.
"Today's broad-based rally reflects multiple catalysts converging - Vietnam's 20% tariff deal setting a precedent, India pushing hard for its own agreement and the U.S.-China trade restrictions being rolled back on ethane," said Christopher Forbes, head of Asia, CMC Markets.
The dollar index edged lower as investors awaited the U.S. Labor Department's June jobs report, due later in the day, after data earlier this week showed private payrolls fell for the first time in over two years.
Trump's massive tax and spending bill, which was pending a possible final approval by the House of Representatives, was also in focus.
The bill is expected to add $3.3 trillion to the national debt, slash taxes and reduce social safety net programs.
While most Asian currencies traded sideways, Taiwan's dollar strengthened 0.5% to touch its highest level since early April 2022.
Exporters' demand to sell the greenback and steady inflows into domestic equities this week sustained the demand for the Taiwan dollar, OCBC forex strategist Christopher Wong said.
The Philippine peso and Indonesia's rupiah were up 0.1%.
HIGHLIGHTS:
** Saudi Arabia, Indonesia sign several deals worth around $27 billion, state news agency says
** US paves way to resume ethane exports to China amid trade truce - Reuters
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