Asia stocks rise after tariff truce extension

August 12, 2025 (MLN): Asia-Pacific markets mostly advanced on Tuesday, with Japan’s Nikkei 225 hitting a record high as investors digested the overnight extension of the U.S.-China trade truce, giving the world’s two largest economies more time to negotiate a deal.

Japan’s Nikkei climbed 2% as markets reopened after Monday’s public holiday, tracking gains across global indices this year, as CNBC reported.

Australia’s S&P/ASX 200 also reached a fresh record high ahead of the Reserve Bank of Australia’s (RBA) policy decision, where a 25 basis points rate cut is widely expected.

Singapore’s trade ministry raised its 2025 growth forecast to 1.5%-2.5%.

MSCI’s broadest index of Asia-Pacific shares outside Japan edged slightly higher, while China’s blue-chip stocks were flat and Hong Kong’s Hang Seng slipped 0.1% in early trade.

U.S. President Donald Trump extended the tariff truce with China by 90 days on Monday, preventing triple-digit duties on Chinese goods, a move anticipated by markets.

The truce follows months of tit-for-tat tariffs and trade talks in Geneva, London, and Stockholm since May.

“The extension preserves the status quo for now, so no immediate implications for investment markets,” said Shane Oliver, chief economist at AMP in Sydney.

Markets remain focused on an eventful week ahead, including the RBA decision, U.S. inflation data, and the first U.S.-Russia leaders’ summit since 2021.

Traders expect another RBA rate cut by November, with guidance on future easing closely watched.

Globally, attention is on July’s U.S. consumer price index (CPI), forecast to rise 0.3% month-on-month for core CPI versus 0.2% in June.

“CPI will be a key test for market tone,” said Marc Velan of Lucerne Investment Management, noting that softer data could lift small-caps, while mega-caps currently dominate.

The Federal Reserve is expected by markets to deliver at least two rate cuts in 2025, though J.P. Morgan forecasts four consecutive cuts starting in September.

In commodities, gold traded at $3,354 after falling 1.6% on Monday when Trump confirmed no tariffs on imported gold bars.

Oil prices were steady ahead of the August 15 Trump-Putin meeting aimed at ending the war in Ukraine.

Velan noted that while markets are not pricing in major breakthroughs, any geopolitical shift could impact commodities and emerging markets.

Currencies were stable, with the dollar steady against the euro and yen. Bitcoin and ether eased slightly after gains in the prior session.

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