Asian Markets Rally on Strong U.S. Jobs Data and Renewed China Trade Talks
Asian shares rallied on Monday, and the U.S. dollar weakened slightly. The catalyst was unexpectedly strong U.S. payroll data released late last week, which eased fears of a sharp economic slowdown. Wall Street had already cheered the news on Friday, sending major indices up. The S&P 500 gained 1 percent and the Nasdaq 1.2 percent. That momentum then carried over into Asia.
Japan's Nikkei gained 0.9%, supported by strong earnings and signs of a rebound in international demand. The Hang Seng Index in Hong Kong climbed 1.3 percent, momentarily rising above the 24,000-point level — a level it hadn't reached since March. The MSCI Asia-Pacific index (excluding Japan) was up 0.5% in early trade.
The upswing also follows last week's broader regional rally. The KOSPI in South Korea and STI in Singapore both surged, as traders took relief from the prospect of reduced tensions in the worldwide trade environment.
But there was still uncertainty. New standoffs in Los Angeles over immigration policy led President Trump to send in the National Guard. The resulting turbulence sent a dose of caution through otherwise buoyant markets. While not directly linked to economic policy, this domestic volatility could spread to investor confidence internationally.
Currency markets, meanwhile, reacted to the change in tone. The dollar fell 0.3 percent against the yen, and the euro rose to $1.1422. Traders will continue to closely watch upcoming U.S. inflation figures, which would likely guide the Federal Reserve's next move on interest rates.
A great deal of attention now is focused on the already looming talks between Beijing and Washington, likely to start this week in London. Senior officials from both countries will hold talks, including U.S. Treasury Secretary Scott Bessent and China's China's Vice Premier He Lifeng. The discussions are expected to center on critical minerals, a market in which China is highly influential. Investors are keeping a close eye, and any progress could help deliver more economic stability in the second half of 2025.
Gold prices slipped slightly, to $3,303.19 an ounce, and oil prices were mostly flat. U.S. crude was flat at around $64.56 after two days of gains, with supply factors and demand outlook for the global economy in investors' minds.
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