Asian stock markets gained on Tuesday, with Japan’s Nikkei reaching an all-time high, as the United States and China extended their tariff truce by another 90 days. The move helped ease trade tensions between the world’s two largest economies, lifting investor sentiment across the region. Market participants shifted their focus toward upcoming U.S. inflation data, which could influence the Federal Reserve’s next interest rate decisions.
Australia’s ASX index also edged higher after the Reserve Bank of Australia cut its main cash rate by 25 basis points to 3.60%, the lowest in two years. The Australian dollar saw choppy trading as investors assessed the central bank’s cautious stance on future easing. Meanwhile, European and U.S. futures pointed to a positive start, with Nasdaq futures up 0.15%.
Japan’s stock rally was driven by gains in technology shares and optimism over trade prospects. In China, blue-chip stocks rose 0.5%, while Hong Kong’s Hang Seng index remained flat. MSCI’s broad Asia-Pacific index, excluding Japan, posted modest gains. Analysts noted that the truce had been largely anticipated, explaining the muted overall market reaction despite the policy breakthrough.
Attention is now turning to U.S. consumer price index data, expected to show a 0.3% monthly rise in core inflation for July, compared with 0.2% in June. Economists suggest the Federal Reserve could proceed with rate cuts starting in September, though a stronger-than-expected inflation reading might delay easing. President Donald Trump has repeatedly pressured Fed Chair Jerome Powell to lower rates, while investors are pricing in at least two cuts this year.
In commodities, gold prices fell 1.6% on Monday to $3,353 after Trump announced no tariffs on imported gold bars. Oil prices ticked higher ahead of the August 15 Trump-Putin summit in Moscow, aimed at brokering a peace deal over the Ukraine conflict. Analysts said markets are not expecting major breakthroughs but noted any geopolitical shifts could influence commodity prices and emerging market assets. The U.S. dollar held steady in early trading, while bitcoin dipped slightly to $118,680 and ethereum gained 1% to $4,290.
Source: Reuters