Asia-Pacific markets rally on US-EU trade deal optimism, Japan nears record highs

Asia-Pacific markets traded mostly higher on Thursday, with Japan's indices approaching record highs, and following a rally on Wall Street Wednesday after the US reached trade deals with the EU.

Reports indicated that the US and EU are moving closer to a deal, with discussions centered around a 15% baseline tariff on EU goods and possible exemptions.

U.

S.

President Donald Trump announced that new "reciprocal" tariffs will start at 15%, with rates ranging from 15% to 50%.

Higher tariffs will target countries the U.

S. has poor relations with, ahead of an August 1 deadline.

Thailand’s trade surplus widened to USD 1.06 billion in June 2025, up from USD 0.22 billion in the same month last year, as exports outpaced imports.

Taiwan has unveiled its “Ten Major AI Infrastructure Projects” initiative, aiming to generate over TWD 15 trillion in economic value by 2040 and position itself as a global AI powerhouse.

Gold fell below $3,380 per ounce on Thursday, extending its more than 1% loss from the previous session.

Japan ( NKY:IND ) rose 1.70% to above 41,600 while the broader Topix Index jumped 1.5% to 2,970 on Thursday, with the latter reaching all-time highs as the recently announced trade deal between the US and Japan continued to support market momentum.

The Japanese yen strengthened past 146 per dollar on Thursday, reaching a two-week high as optimism surrounding the new US-Japan trade deal lifted demand.

On the domestic front, Japan’s private sector growth held steady in July, supported by solid services activity, though manufacturing slipped into contraction.

The au Jibun Bank Japan Manufacturing PMI unexpectedly dropped to 48.8 in July 2025 from June’s final reading of 50.1, which marked the first time in 13 months that the index exceeded the 50.0 threshold separating expansion from contraction, preliminary estimates showed.

The S&P Japan Services PMI rose to 53.5 in July 2025 from a final 51.7 in the previous month, preliminary data showed.

China ( SHCOMP ) rose 0.47% to above 3,590 and the Shenzhen Component gaining 0.5% to 11,120, as optimism over renewed US-China trade talks pushed both indexes to multi-month highs, and the offshore yuan strengthened past 7.14 per dollar on Thursday, extending gains from the previous session and hitting its strongest level since November 2024. Optimism continued ahead of a planned meeting between U.S. and Chinese officials in Stockholm next week to discuss extending the current tariff truce.

Investors are now turning their attention to China’s industrial profits data due this weekend for clues on how domestic firms are managing ongoing trade uncertainty.

Hong Kong ( HSI ) rose 0.56% to 25,670 in early trade on Thursday, marking the fifth session of gains and holding at their highest level in nearly four years.

India ( SENSEX ) fell 0.25% The HSBC India Manufacturing PMI climbed to 59.2 in July 2025 from 58.4 in the previous month, according to preliminary estimates.

The HSBC India Services PMI declined to 59.4 in July 2025 from 60.4 in the previous month, preliminary readings showed.

Australia ( AS51 ) fell 0.32% to around 8,730 on Thursday, halting its two-session win streak, as losses in gold miners offset gains in healthcare.

The Australian dollar strengthened to above $0.661 on Thursday, extending its five-session rally to its highest level since November 2024, fueled by optimism over latest global trade developments.

On the economic data front, Australian business activity expanded at its fastest rate since April 2022 in July, boosted by the first rise in manufacturing output in three months and a sharp acceleration in services.

The S&P Global Flash Australia Services PMI Business Activity Index rose to 53.8 in July, up from 51.8 in June.

The S&P Global Australia Manufacturing PMI rose to 51.6 in July, up from 50.6 in June, flash data showed.

In the U.S., on Wednesday, all three major indexes ended higher buoyed by optimism over new trade agreements and strong corporate momentum.

Attention now turns to the Fed’s policy meeting next week, where rates are widely expected to remain unchanged amid lingering uncertainty around global tariffs.

U.S. stock futures were mixed on Thursday as investors digested earnings from major tech firms: Dow -0.29% ; S&P 500 +0.07% ; Nasdaq +0.29% .

Currencies: ( JPY:USD ), ( CNY:USD ), ( AUD:USD ), ( INR:USD ), ( HKD:USD ), ( NZD:USD ).

More on Asia: Trump says U.S. strikes ‘massive’ trade deal with Japan, imposes 15% tariffs Japan vows more rice imports from U.S. as part of trade deal Japanese PM Shigeru Ishiba to step down RBA holds rates steady, citing unclear inflation picture in July minutes Japan's core inflation eases to 3.3% in June, slowest pace since March.