Important Developments in the Markets
- Japan: The Nikkei index in Tokyo rose by about 1.1 percent, partly due to the recovery of chip stocks.
- China: The Shanghai Composite Index increased by 0.2 percent, while the CSI-300 Index, which includes the major stocks of the Chinese mainland exchanges, also saw a slight rise. The strategically important rare earth sector led domestic gains with an increase of 1.6 percent.
- Hong Kong: The Hang Seng Index rose by 1.0 percent.
- South Korea: The Kospi index in Seoul showed the most significant gain with an increase of 1.5 percent, driven by technology stocks.
- Australia: No trading took place in Sydney due to the “King’s Birthday” holiday.
Background of Tariff Talks
The hope for progress in tariff talks between the US and China is driving up Asian markets. These negotiations, which are supposed to take place in London on Monday, could lead to a further de-escalation of the trade conflict after both sides agreed in mid-May to temporarily lower their trade tariffs. Markets are hoping for a positive development that could boost global trade and economic stability.
Economic Forecasts and Trade Relations
The economic forecasts for the Asia-Pacific region are closely tied to trade relations between the US and China. An improvement in relations could lead to increased economic activity and investments, while a deterioration in relations could potentially have negative impacts on the markets. Recent developments, including stronger US labor market reports, have also contributed to a positive mood in the markets.