Asian shares advance, with Japan's benchmark surging after ruling party
forms new coalition
[October 20, 2025] By
ELAINE KURTENBACH
BANGKOK (AP) — Asian markets surged Monday after Wall Street finished a
winning week, overcoming worries over bank lending and the trade war
with China.
U.S. futures edged higher while oil prices fell.
Japan’s benchmark Nikkei 225 jumped 2.9%, to 48,970.40, setting a new
record, after its governing Liberal Democrats found a new coalition
partner, securing support for its leader Sanae Takaichi to become the
country’s first female prime minister.
Takaichi is expected to push for market-supporting policies such as low
interest rates and higher government spending.
China reported its economy grew at a 4.8% annual pace in the last
quarter, supported by relatively strong exports as companies increased
shipments markets other than the U.S.
Still, it was the slowest pace in a year. The world's second largest
economy is still struggling to emerge from a prolonged downturn in its
property market and to encourage consumers and businesses to spend more.
China's ruling Commumist Party leadership convened a meeting Monday in
Beijing that is expected to set policy goals for the coming five years
and also tackle personnel changes.
The outcome of the closed door meeting this week will likely emerge
gradually and be formally endorsed at the annual session of the national
legislature in early March.
Hong Kong's Hang Seng advanced 2.5% to 25,884.81, while the Shanghai
Composite index added 0.7% to 3,866.77.
In South Korea, the Kospi surged 1.3% to 3,796.64, setting another
record on hopes for a trade deal with Washington and strong demand for
semiconductors. SK Hynix gained 3.3% while automakers Kia Corp. rose
2.7% and Hyundai Motor Co. climbed 2.5%.
Australia's S&P/ASX 200 rose 0.2% to 9,009.10.
On Friday, U.S. stocks cruised higher after banks recovered some of
their sharp losses from the day before.
The S&P 500 rose 0.5% to 6,664.01. The Dow Jones Industrial Average
added 0.5% to 46,190.61 and the Nasdaq composite climbed 0.5% to
22,679.97.
It was the best week for the S&P 500 since early August,.
Some of the nervousness around U.S.-China trade tensions eased on Friday
after President Donald Trump said that very high tariffs he threatened
to put on Chinese imports are not sustainable.
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A person walks in front of an electronic stock board showing Japan's
Nikkei index at a securities firm Monday, Oct. 20, 2025, in Tokyo.
(AP Photo/Eugene Hoshiko)
 Trump also told Fox News Channel’s
“Sunday Morning Futures” that he would meet with China’s leader, Xi
Jinping, at an upcoming conference in South Korea. That's counter to
an earlier, angry posting he made on social media, where he said
there seemed to be “no reason” for such a meeting.
Bank stocks, meanwhile, stabilized on Friday after several reported
stronger profit for the latest quarter than analysts expected,
including Truist Financial, Fifth Third Bancorp and Huntington
Bancshares.
Zions Bancorp., which is charging off $50 million of loans where it
found “apparent misrepresentations and contractual defaults” by the
borrowers, climbed 5.8% following a 13.1% loss on Thursday.
Western Alliance Bancorp, which is suing a borrower due to
allegations of fraud, rose 3.1% after a 10.8% fall on Thursday.
The quality of loans that banks and other lenders have made is under
scruntiny following last month’s Chapter 11 bankruptcy protection
filing of First Brands Group, a supplier of aftermarket auto parts.
The question is whether the lenders’ problems are just a collection
of one-offs or a signal of something larger threatening the
industry. Uncertainty is high following a long stretch where many
borrowers were able to stay in business, even with the weight of
higher interest rates. And with prices soaring to records for all
kinds of investments, the appetite for risk may have gotten too
high.
JPMorgan CEO Jamie Dimon addressed the issue on an earnings
conference call with analysts earlier this week.
“When you see one cockroach, there are probably more,” Dimon said.
“Everyone should be forewarned on this one.”
In other dealings early Monday, U.S. benchmark crude oil lost 19
cents to $56.96 a barrel. Brent crude, the international standard,
also gave up 19 cents, to $61.10 a barrel.
The U.S. dollar rose to 150.87 Japanese yen from 150.59 yen. The
euro climbed to $1.1667 from $1.1651.
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