Asia Stocks Climb As Trump-Xi Meeting News Eases Trade Jitters, Japan CPI in Focus
The Asian stock market is surging after the announcement of the Trump-Xi expected meeting next week. Investors are more hopeful that the meeting could reduce the tensions between the two global giants. It is expected that this meeting will eliminate tech restrictions, ease trade rules, and reduce tariffs. The investors were long suffering from US-China trade conflicts, US 100% tariffs on Chinese goods, and Beijing’s rare-earth export curbs.
White House Press Secretary announced that “President Donald Trump will meet with Chinese President Xi Jinping on the sidelines of the Asia-Pacific Economic Cooperation Summit in South Korea on Oct. 30.” President Donald Trump said, “I think we’ll make a deal. He (Xi Jinping) would now like, I’m not sure that he did at the beginning, he would now like that war to end.”
Trump further stated on trade and fentanyl, saying that “I’m meeting with President Xi… The first question I’m going to be asking him about is fentanyl. They make $100 million selling fentanyl into our country. They lose $100 billion with the 20% tariff. So it’s not a good business proposition.”
Japan’s Inflation and Factory Data in Spotlight
Reuters said that “Japan’s manufacturing sector contracted in October at the fastest pace in 19 months due to a sharper decline in new orders, a private-sector survey showed on Friday.”
Investors also digested Japan’s latest CPI and factory activity figures. Reuters further states that “The S&P Global flash Japan Manufacturing Purchasing Managers’ Index (PMI) fell to 48.3 in October from a final reading of 48.5 in September, hitting the lowest since March 2024. It has remained below the 50.0 threshold that separates growth from contraction for four straight months.”
In the manufacturing sector, factory output remained flat. It shows rising global trade uncertainty and shaken investor confidence. Japan’s CPI data is far more important than the key US inflation data. It could influence global rate expectations.
Ministry of Economy, Trade and Industry of Japan’s august data shows that “Production fell 1.5% from the previous month and 1.6% from the previous year. Operating ratio dropped 2.3% month-on-month.”
Broader Market Signals and Investor Sentiment
On October 10, CNBC stated that “U.S. Treasury yields were lower on Friday as investors ran for safety following a threat from President Donald Trump on higher tariffs targeting Chinese goods.”
They further added, “The 10-year Treasury was down more than nine basis points at 4.057%, while the 2-year Treasury yield was more than seven basis points lower at 3.526%. The longer-maturity 30-year Treasury yield dropped more than nine basis points to 4.638%.”
U.S. stock futures remained slightly higher in Asian market hours. Similarly, the interest rate on 10-year U.S. government bonds went up from 3.95% to 4%. This meeting could completely reset trade expectations. Traders are keenly watching to decide what to do next.
The recent rally was just a short-term relief rather than a permanent hike. Investors warn that volatility may return, especially if talks between the two countries stall. They also warn that inflation surprises should be closely monitored to prevent sudden market crashes.
This meeting will make or break the big economies’ trade policies and will affect the entire world. China’s export policy is always a critical driver for Asia’s next market move. Anything good or bad for the Chinese market is equally relevant for the whole asian market.
