Japan's Nikkei 225 hits record high as U.S.-China tariff truce extension lifts sentiment

Asia-Pacific markets mostly closed higher Tuesday.

Hong Kong's Hang Seng Index rose 0.25% to close at 24,969.68, while mainland China's CSI 300 index increased by 0.52% to 4,143.83.

Meanwhile, South Korea's Kospi index fell 0.53% to close at 3,189.91, while the small-cap Kosdaq lost 0.57% to 807.19.

Australia's S&P/ASX 200 benchmark advanced 0.41% at 8,888.80.

Japan's Nikkei 225 benchmark pared earlier gains to rise 2.15% at 42,718.17, while the broader Topix index added 1.39% to 3,066.37.

Over in India, the 50-stock benchmark Nifty 50 was flat, while the BSE Sensex index ticked down 0.12% as of 1:52 p.m. Indian Standard Time (4:23 a.m. ET).

— Amala Balakrishner

Australia's benchmark S&P/ASX 200 added 0.28% to 8,869.70 as of 2:45 p.m. Australian Eastern Standard Time (12:45 p.m. ET), after the Reserve Bank of Australia cut rates by 25 basis points.

The benchmark had hit a fresh high earlier in the session.

Meanwhile, the Australian dollar was little changed, and appreciated 0.02% against the greenback to 0.6511.

— Amala Balakrishner

Australia's central bank cut its policy rate by 25 basis points Tuesday, as low inflation allows the country room to loosen its monetary policy and boost its slowing economy.

The country's benchmark rates are now at 3.6%, their lowest since April 2023, and in line with expectations of economists polled by Reuters.

Read the full story, here.

— Lim Hui Jie

India's Nifty 50 opened higher Tuesday.

The 50-stock benchmark was up 0.13% as of 9:30 a.m. Indian Standard time (12 p.m. ET).

Meanwhile, the BSE Sensex index was last seen down 0.19%.

The country's consumer price index reading for July is expected later in the day. Economists polled by Reuters forecast a 1.76% year-on-year expansion, from the 2.1% increase in the month before.

— Amala Balakrishner

Technology counters in Asia traded mixed Tuesday after U.S. President Donald Trump permitted Nvidia and AMD to resume some chip sales in China.

Gains among tech stocks in Japan were led by Lasertec and SoftBank Group, which surged 7.3% and 7.54%, respectively, as of 12:01 p.m. Singapore time (12:01 a.m. ET Tuesday).

Strong gains were also seen in Advantest Corp, which rallied 7.06%, Japan Display, which gained 5.56% and Renesas Electronics, which advanced 2.75%.

Over in South Korea, shares of SK Hynix increased by 1.69% while Samsung Electronics was trading 1.06% higher.

Taiwan's TSMC trading 0.42% higher and Hon Hai Precision Industry — known globally as Foxconn — down 0.51%.

Hong Kong's tech-heavy Hang Seng Tech index was similarly down 0.35%.

The three worst performers on the index were Kingdee International Software Group, which plunged 7.16%, Kuaishou Technology, which declined 6.15% and Bilibili Inc, which retreated 2.84%.

Meanwhile, losses were also seen in the shares of Alibaba Group, which fell 1.6%, Xpeng, which dropped 1.53% and Li Auto, which lost 1.49%.

— Amala Balakrishner

U.S. President Donald Trump's decision to extend the trade truce with Beijing for another 90 days offers scope for a "relief jump" for stocks listed on the Hong Kong exchange, Mizuho Securities' head of macro research, Asia ex-Japan, Vishnu Varathan, wrote in a Tuesday note.

He added that the extension was presumably made on the "grounds of optimism about and goodwill for an impending trade deal."

Hong Kong stocks have been trading near the flatline, with the Hang Seng Index last seen up 0.05% as of 11: 32 a.m. local time (11:32 p.m. ET Monday).

– Amala Balakrishner

Singapore's Ministry of Trade and Industry has revised its 2025 growth forecast for the city-state upwards to 1.5%-2.5% from 0%-2%.

The ministry announced its narrowed forecast Tuesday and said it "largely reflects the better-than-expected performance of the Singapore economy in the first half of 2025."

Singapore's economy expanded by 4.4% on a year-on-year basis in the second quarter ended June, extending the 4.1% growth recorded in the preceding quarter, the ministry revealed.

"The new forecast range implies the MTI projects GDP growth to average within the range of -1.2% to 0.9% y-o-y in H2, down from 4.3% in H1," no thanks to concerns about uncertainty on the U.S.' trade policies, Nomura's economists Euben Paracuelles and Charnon Boonnuch wrote in a Tuesday note.

Looking ahead, they have revised their 2025 GDP forecast for Singapore to 2.6%, from their previous estimate of 2%.

This "implies a growth slowdown to 1.0% year on year in the second half of the year, from 4.3% in the first half, reflecting payback effects after the front-loading of exports," the economists added.

— Amala Balakrishner

Chinese and Hong Kong stocks were little changed Tuesday, as investors assessed the latest developments in U.S.-China trade relations.

As of 9:45 a.m. local time (9:45 p.m. ET Monday), the Hang Seng Index moved down 0.1%, while mainland's CSI 300 was flat.

— Amala Balakrishner

Shares of SoftBank Group surged as much as 8.01% Tuesday, extending its gains for the fifth consecutive session.

The Japanese investment firm was also among the best performing stocks on the blue-chip Nikkei 225 benchmark which hit a fresh high earlier in the session.

The gains come as the Japanese firm has selected investment banks to support a potential listing of its portfolio company —Japanese payments app operator PayPay — in the U.S., Reuters reported Monday citing two people familiar with the matter.

— Amala Balakrishner

Australian stocks extended their gains for a second day, reaching a new record high.

The 200-stock benchmark S&P/ASX 200 rose 0.14% to 8,856.80 as of 10.48 a.m. Australian Eastern Standard Time (8:48 p.m. ET Monday), after hitting a fresh high of 8,828.67 earlier in the session.

The benchmark's strong moves come as trade negotiations between the U.S. and China show signs of progress.

China is the top export destination for Australian goods, and investors are hoping that improving trade relations between the world's two largest economies would spur economic activity down under.

— Amala Balakrishner

Japan's blue-chip Nikkei 225 index hit an all-time high of 42,629.17 on Tuesday, led by energy, technology, financials and utilities sectors.

The best performing stocks on the Nikkei 225 index were Mitsui Mining and Smelting Co which surged nearly 12%, SoftBank Group and Advantest which gained about 7% each.

— Amala Balakrishner

Asia-Pacific markets opened higher Tuesday.

Japan's Nikkei 225 benchmark rose 1.26%, while the broader Topix index added 0.74%, as of 8:07 a.m. Singapore time (8:07 p.m. ET Monday).

In South Korea, the Kospi index added 0.66%, while the small-cap Kosdaq increased by 0.4%.

Over in Australia, the S&P/ASX 200 benchmark was flat.

— Amala Balakrishner

U.S. equity futures mostly rose in early Asia hours following declines in all three key benchmarks on Wall Street overnight.

The S&P 500 futures moved up 0.21%, while the Nasdaq 100 futures added 0.13% as of 7:27 a.m. Singapore time (7:27 p.m. ET Monday).

Futures tied to the Dow Jones Industrial Average dropped 15 points, or 0.03%.

— Amala Balakrishner

Good morning from Singapore.

The U.S.-China trade truce extension overnight has allowed the world's largest economies more room to negotiate a deal.

Investors, meanwhile, await the Australian central bank's rate decision. The Reserve Bank of Australia is expected to slash cash rates to 3.6% from 3.85% at the close of its two-day policy meeting later in the day.

Australia's S&P/ASX 200 was set to start the day lower with futures tied to the benchmark at 8,783, compared with the index's Monday close of 8,844.80.

Japan Nikkei 225 was set to open higher, with the futures contract in Chicago at 42,295 while its counterpart in Osaka last traded at 42,270, against the index's last close of 41,820.48.

Futures for Hong Kong's Hang Seng index stood at 24,765, pointing to a weaker open compared with the HSI's last close of 24,906.81.

— Amala Balakrishner

Bank of America thinks the Federal Reserve may want to hold off on cutting interest rates at the end of its next FOMC meeting in the wake of the latest jobs report.

"We think those FOMC members that argue for cuts don't put enough weight on the labor supply shock or the fact that inflation is stuck above target, with risks of a larger and more persistent shock after the latest tariff hikes," economist Claudio Irigoyen wrote on Monday. "Cutting in September may risk starting the easing cycle without evidence that inflation has peaked."

He also said that he still doesn't expect the Federal Reserve to cut interest rates this year.

"The downward revision to nonfarm payrolls increases the probability of what we view as the most likely alternate scenario: 'bad cuts,' due to deterioration in the labor market," Irigoyen wrote. "We view the combination of policies to be mildly stagflationary, with significant uncertainty regarding the size and timing of the impact on inflation and growth."

— Sean Conlon

Stocks fell across the board to end Monday's session.

The Dow Jones Industrial Average lost 200.52 points, or 0.45%, and closed at 43,975.09. The S&P 500 slipped 0.25% to end at 6,373.45, while the Nasdaq Composite shed 0.3% to settle at 21,385.40.

— Lisa Kailai Han