Asia markets rally on U.S.-Japan trade progress

July 24, 2025 (MLN): Asia-Pacific markets opened on a strong note, buoyed by encouraging trade developments between the U.S. and Japan and growing optimism around a potential deal with the European Union.

Japan’s Topix index surged 1.4%, extending gains for a second day and setting a new all-time high, as CNBC reported.

The rally mirrored Wall Street’s overnight momentum, where the S&P 500 rose 0.78% to a record close of 6,358.91, marking its 12th record this year.

MSCI’s broadest index of Asia-Pacific shares outside Japan added 0.3%.

The upbeat sentiment was driven by a recent U.S.-Japan trade agreement that has sparked speculation of further deals to prevent wide-ranging tariffs.

Additional agreements have been reached with the Philippines and Indonesia, while officials from the European Commission indicate that a pact with the EU, potentially imposing 15% tariffs on certain imports while waiving others, is nearing completion.

Adding to the optimism, U.S. Treasury Secretary Scott Bessent confirmed that American and Chinese officials are scheduled to meet in Stockholm next week.

Brian Martin, ANZ’s head of G3 economics, commented that while the worst-case fears around tariffs appear to be easing, the increase in tariffs remains a challenge for consumers.

Investor focus also turned to earnings season in the U.S., with 23% of S&P 500 companies having reported so far.

Of those, 85% have exceeded expectations, according to LSEG data.

Notably, Alphabet beat estimates and announced increased capital spending driven by soaring demand for its cloud computing services.

In contrast, Tesla reported its steepest quarterly sales decline in over a decade and missed profit forecasts.

As markets assessed earnings from the "Magnificent Seven" tech giants, U.S. futures showed strength, with S&P 500 e-minis rising 0.13% and Nasdaq contracts up 0.4%.

Euro Stoxx 50 futures climbed 1.3% to 5,435, and German DAX futures gained 1.3% in early trading.

Currency and commodity markets also reflected the improving mood.

The Australian dollar reached $0.66, near its highest level since November 2024, while the U.S. dollar dipped 0.1% to 146.38 yen.

U.S. crude advanced 0.4% to $65.5 per barrel, and spot gold edged up 0.1% to $3,390.84 an ounce.

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