BANGKOK (AP) — Asian shares rose and U.S. futures jumped on Monday, with Japan's Nikkei 225 index topping 50,000 for the first time.
Work on trade agreements that could ease friction between the US, China and other major trading partners contributed to optimism as US President Donald Trump visited Malaysia for a Southeast Asia summit, where he reached preliminary trade agreements with Malaysia, Thailand, Cambodia and Vietnam.
A trade deal between the United States and China is moving closer, officials from the world's two largest economies said Sunday, reaching an initial consensus that Trump and Chinese leader Xi Jinping will try to finalize during a high-stakes meeting later this week.
“This is not just a diplomatic photo op. Behind the pageantry, top trade aides in Washington and Beijing have quietly outlined a structure that might, just might, keep the world's two largest economies from tearing the field apart again,” Stephen Innes of SPI Asset Management said in a commentary.
Trump was heading to Japan and then ended his Asia tour in South Korea, where he is expected to meet Xi Jinping on the sidelines of the Pacific Rim Summit, the Asia-Pacific Economic Cooperation (known as APEC) forum.
A report from the APEC secretariat released Monday forecast annual growth in the Pacific region to slow to 3% this year from 3.6% last year, partly due to trade restrictions and higher tariffs.
In Japan, opinion polls have shown that newly appointed Prime Minister Sanae Takaichi enjoys high levels of public support for his market-oriented policies. The Nikkei 225 added 2.1% to 50,329.08, hitting a record intraday high.
Takaichi is Japan's first female prime minister. She has advocated for increased defense spending, and this has driven up share prices of major defense contractors such as Kawasaki Heavy Industries, which rose 8.7%. IHI Corp. shares shares jumped 2.6%, while Hitachi shares jumped 2.7%.
Trump has long complained that American cars are being locked out of Japanese markets, which is one reason he imposed tariffs of 25% and later cut them to 15% on America's most important ally in Asia. So the Japanese government floated the idea of purchasing a fleet of Ford F-150 trucks to inspect roads and infrastructure.
Stocks jumped in South Korea, where the Kospi index rose 2% to 4,018.73, also a record. Investors are hoping for a trade deal with Trump.
Chinese markets also saw solid growth. Hong Kong's Hang Seng rose 1% to 26,427.34 and the Shanghai Composite Index added 1% to 3,991.35.
In Australia, the S&P/ASX 200 index rose 0.3% to 9,047.40.
Taiwan's Taiex added 2.1% and India's Sensex added 0.5%.
US stocks hit records on Friday after inflation data was less painful than expected.
The S&P 500 rose 0.8% to 6,791.69, topping its previous all-time high set earlier this month. The Dow Jones Industrial Average rose 1% to 47,207.12, also a record.
The Nasdaq rose 1.1% to a record high of 23,204.87.
The inflation data is encouraging as it could mean less suffering for low- and middle-income households struggling with still-high price increases. More importantly for Wall Street, it could also clear the way for the Federal Reserve to cut interest rates further in hopes of jumpstarting a slowing labor market.
The Fed just cut its key interest rate last month for the first time this year, but is hesitant to promise more relief because lower rates could worsen inflation in addition to hitting the economy and investment prices.
Most major U.S. companies reported higher earnings in the latest quarter than analysts had expected, also raising hopes for robust growth.
In other trading Monday morning, benchmark U.S. crude oil was up 15 cents at $61.65 a barrel. Brent crude, the international standard, rose 12 cents to $65.32 a barrel.
The US dollar rose to 153.15 Japanese yen from 152.85 yen. The euro fell to $1.1622 from $1.1636.
