Asian stocks extended their upward momentum on Thursday amid rising optimism that trade tensions between the U.S. and China may ease, with top officials from both countries set to hold high-level negotiations this weekend. Adding to the positive sentiment, U.S. President Donald Trump teased the announcement of a “major trade deal” later in the day.
The market rally follows weeks of relative calm after Trump’s “Liberation Day” tariff announcement on April 2. Hopes for progress surged this week after confirmation that U.S. Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer would meet with Chinese Vice Premier He Lifeng in Switzerland for the first direct talks since the sweeping tariffs were introduced.
The talks aim to ease escalating trade tensions that have seen the U.S. impose tariffs of up to 145% on Chinese goods, with China responding with 125% duties of its own.
Meanwhile, Trump’s cryptic message on Truth Social about an imminent deal with a “big, and highly respected” nation sparked speculation on trading floors. The New York Times suggested the country in question might be the UK, prompting a rally in the British pound, which climbed further against the dollar in early Asian trading.
Stock markets across Asia followed Wall Street’s lead, posting gains across major indices. Hong Kong, Tokyo, Shanghai, Seoul, Sydney, Wellington, Manila, Taipei, and Jakarta all traded in positive territory.
Despite the upbeat mood, the White House’s aggressive trade stance continues to weigh on sentiment. Federal Reserve Chair Jerome Powell warned on Wednesday of growing uncertainty around U.S. trade policy, cautioning that prolonged tariffs could stoke inflation, slow growth, and increase unemployment.
“If the large increases in tariffs that have been announced are sustained, they’re likely to generate a rise in inflation, a slowdown in economic growth and an increase in unemployment,” Powell said in a press briefing following the Fed’s decision to hold interest rates steady. He added that inflationary impacts could be temporary but warned of the risk they may persist.
The Fed’s official statement noted heightened uncertainty in the economic outlook, with rising risks of inflation and job market weakness. Trump, who has recently criticized Powell for not cutting rates, has fueled concerns about potential political interference at the central bank—though analysts expect the Fed to hold off on any policy change until at least July.
“Recent job numbers show solid momentum, giving the Fed room to stay put,” said Tai Hui of JP Morgan Asset Management. “With just one more employment report before the June policy meeting, the likelihood of a rate cut is low unless economic data significantly worsens.”
Key Market Figures as of 02:30 GMT:
• Tokyo – Nikkei 225: +0.2% at 36,863.15
• Hong Kong – Hang Seng: +0.9% at 22,895.17
• Shanghai – Composite: +0.1% at 3,345.57
• Euro/Dollar: $1.1317, up from $1.1301
• Pound/Dollar: $1.3347, up from $1.3286
• Dollar/Yen: 143.70, down from 143.89
• Euro/Pound: 85.04p, down from 85.05p
• WTI Crude: +0.3% at $58.26 per barrel
• Brent Crude: +0.3% at $61.27 per barrel
• Dow Jones (New York): +0.7% at 41,113.97 (close)
• FTSE 100 (London): -0.4% at 8,559.33 (close)