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Japan Leads Asia-Pacific Rally

Japan’s benchmark Nikkei 225 soared past the 45,000 mark for the first time on Monday, leading gains across Asia-Pacific markets. The surge comes after U.S. President Donald Trump reported that trade negotiations with China in Spain were progressing positively, easing investor concerns over lingering tensions.

The broader Topix index also climbed 0.41% to an all-time high of 3,172.33, reflecting widespread confidence in Japan’s equity market.

Trade Talks and TikTok Deal Shape Market Sentiment

While trade talks dominated headlines, they were overshadowed by a “framework” agreement on the divestment of Chinese-owned TikTok, announced by U.S. Treasury Secretary Scott Bessent from Madrid. According to officials, commercial terms of the deal have already been finalized, with Presidents Trump and Xi Jinping scheduled to discuss the details on Friday.

Analysts note that these developments reduce uncertainties for investors, particularly in tech and manufacturing sectors closely tied to U.S.-China trade relations.

South Korea Posts Record Gains

South Korea’s Kospi extended its rally for the second consecutive day, reaching record levels after the government scrapped plans to increase capital gains taxes on stocks. Notable movers included car dealer Kolon Mobility Group (+29.91%), Il Dong Pharmaceutical (+18.16%), and instant noodle maker Nongshim (+16.78%).

However, South Korea’s small-cap Kosdaq index slipped 0.18%, reflecting mixed investor sentiment among smaller companies.

Mixed Performance in Other Asia-Pacific Markets

Australia’s ASX/S&P 200 edged higher by 0.26%, signaling modest investor optimism. In contrast, Hong Kong’s Hang Seng Index fell 0.13%, and mainland China’s CSI 300 retreated 0.28%, weighed down by sector-specific pressures despite overall positive trade signals.

U.S. Markets Set the Tone for Asia

Overnight in the U.S., major stock indices posted gains ahead of a critical Federal Reserve meeting. The S&P 500 climbed 0.5% to 6,615.28, surpassing the 6,600 level for the first time. The Nasdaq Composite rose 0.9% to 22,348.75, reaching a new record, while the Dow Jones Industrial Average eked out a 0.1% gain, finishing at 45,883.45.

The strong U.S. performance bolstered risk appetite across the Asia-Pacific region, contributing to the Nikkei and Kospi’s historic highs.

Outlook for Investors

With ongoing trade negotiations and strategic policy decisions, investors are closely monitoring developments in the U.S.-China relationship. Market analysts suggest that sustained diplomatic progress, combined with favorable domestic policies in Japan and South Korea, could continue to drive equity gains across the region in the near term.