Asian shares gain as Trump says he expects a trade deal with China
[October 27, 2025] By
ELAINE KURTENBACH
BANGKOK (AP) — Asian shares rallied and U.S. futures jumped Monday, with
Japan’s benchmark Nikkei 225 topping 50,000 for the first time as U.S.
President Donald Trump said he expected to reach a trade agreement with
China.
Work on trade deals that might alleviate friction between the U.S.,
China and other major trading partners has reassured investors.
Officials from the world’s two largest economies said Sunday that they
had reached an initial consensus for Trump and Chinese leader Xi Jinping
to try to finalize during a high-stakes meeting later in the week.
“I have a lot of respect for President Xi,” Trump told reporters after
visiting Malaysia for a summit of Southeast Asian nations, where he
reached preliminary trade agreements with Malaysia, Thailand, Cambodia
and Vietnam.
“I think we’re going to come away with a deal,” Trump said.
Trump was heading next to Japan before ending his Asian tour in South
Korea where he is expected to meet with Xi on the sidelines of a Pacific
Rim summit, the Asia-Pacific Economic Cooperation (known as APEC) forum.
In Japan, opinion polls showed newly installed Prime Minister Sanae
Takaichi enjoying high levels of public support for her market-friendly
policies and apparent strong performance in her debut at the regional
summit. The Nikkei 225 gained 2.5% to 50,512.32, a new closing high.
Takaichi is Japan's first female prime minister. She favors raising
defense spending and that has boosted prices of stocks in major defense
contractors, such as Kawasaki Heavy Industries, which gained 9%. IHI
Corp. jumped 2.8% and Hitachi gained 3.7%.
Trump has long complained American cars were shut out Japanese markets,
one of various reasons he cited for imposing tariffs of 25%, then
lowered to 15%, on American's most vital ally in Asia. So as part of its
negotiations with Washington, Japan’s government has floated the idea of
buying a fleet of Ford F-150 trucks to use to inspect roads and
infrastructure.
Shares jumped in South Korea, where the Kospi gained 2.6% to 4,042.83,
also a record. Investors there are hoping for a trade deal with Trump.
Chinese markets likewise saw solid gains. Hong Kong's Hang Seng rose
1.1% to 26,434.69, while the Shanghai Composite index added 1.2% to
3,996.94.
“This isn’t just photo-op diplomacy. Behind the showmanship, Washington
and Beijing’s top trade lieutenants have quietly mapped out a framework
that might, just might, keep the world’s two largest economies from
tearing up the field again,” Stephen Innes of SPI Asset Management said
in a commentary.
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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. 27, 2025, in Tokyo.
(AP Photo/Eugene Hoshiko)
 In Australia, the S&P/ASX 200 picked
up 0.4% to 9,055.60.
Taiwan's Taiex gained 1.7% and the Sensex in India was up 0.7%.
Despite the positive talk about trade agreements, a report by the
APEC secretariat released Monday forecast that annual growth in the
region circling the Pacific will slow to 3% this year from 3.6% last
year, partly due to trade restrictions and higher tariffs.
On Friday, U.S. stocks hit records after an update on inflation came
in a bit less painful than feared.
The S&P 500 rose 0.8% to 6,791.69, topping its prior all-time high
set earlier this month. The Dow Jones Industrial Average rallied 1%
to 47,207.12, also a record.
The Nasdaq composite climbed 1.1% to a record of 23,204.87.
The data on inflation was encouraging because it could mean less
pain for lower- and middle-income households struggling with
still-high increases in prices. Even more importantly for Wall
Street, it could also clear the way for the Federal Reserve to keep
cutting interest rates in hopes of giving a boost to the slowing job
market.
The Fed just cut its main interest rate last month for the first
time this year, but it’s been hesitant to promise more relief
because lower rates can make inflation worse, beyond goosing the
economy and prices for investments.
Most big U.S. companies are reporting stronger profits for the
latest quarter than analysts expected, also raising hopes for steady
growth.
In other dealings early Monday, U.S. benchmark crude oil gained 18
cents to $61.68 per barrel. Brent crude, the international standard,
was up 17 cents at $65.37 per barrel.
The U.S. dollar rose to 152.96 Japanese yen from 152.85 yen. The
euro slipped to $1.1624 from $1.1636.
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