Optimism about trade deals boosts Asia Pacific stock markets, with Japan and Singapore leading gains. The US dollar is mixed, while oil prices decline despite the risk-on sentiment.
JP and HK stocks rallied on trade deal optimism, US dollar mix, WTI at risk of bearish breakdown
Optimism about trade deals has reinforced the prevailing bullish tone in most Asia-Pacific stock markets today. US President Trump announced that the US has reached a trade deal with Japan, which will set tariffs on Japanese imports at 15%, a reduction from the previously announced higher tariff rate of 25%, and Japan will invest US$550 billion into the US.
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The Nikkei 225 outperformed and rocketed by 3.7% on an intraday basis, on track for the best single-day performance since 10 April 2025 and hit a 12-month high of 41,255. In conjunction, Hong Kong’s Hang Seng Index has continued its advancement within its medium-term bullish trend and jumped by 1% to hit almost a four-year high of 25,405 on the backdrop of a possible US-China trade truce extension beyond the 12 August deadline, as mentioned by US Treasury Secretary Bessent before the upcoming US-China third round of trade talks held in Stockholm next week.
Singapore’s Straits Times Index is on track to stage its 13-consecutive bullish run of fresh all-time high by advancing 0.4% intraday to hit 4,226 at this time of writing. In addition, Australia’s ASX 200 has notched a gain of 0.7% to close at 8,737, led by materials and energy stocks.
In the FX market, the US dollar is trading in a mixed bag in today’s Asia session after the US Dollar Index staged two consecutive days of decline, with a loss of -0.5% seen on Wednesday to close at 97.40 and a bearish breakdown below its 20-day moving average (97.60).
The top performers are the higher beta currencies that tend to perform well against the greenback in a risk-on environment: the Kiwi dollar (0.2%) and the Aussie dollar (0.1%). On the flipside, safe haven currencies declined against the US dollar; Japanese yen (-0.2) and Swiss franc (-0.2%).
The intraday minor bounce seen in the JPY has also been reinforced by a dovish remark from Bank of Japan (BoJ) Deputy Governor Uchida, who indicated there’s little immediate need to raise interest rates in Japan after the US-Japan trade deal announcement.
After hitting a 5-week high of US$3,431 yesterday, Gold (XAU/USD) has shed -0.2% due to trade deal optimism and short-term overbought technical readings. Despite today’s intraday losses, the yellow metal’s short-term bullish trend remains intact with key support at US$3,385/3,360.
However, oil prices did not join the risk-on sentiment seen in stocks and continued to inch lower. The West Texas crude oil traded lower for the fourth consecutive session with an intraday drop of -0.3% to US$66.30/barrel and showed signs of a potential bearish breakdown below its fourth-week range support in place since 24 June at US$65.20/barrel.
Our YouTube video above contains the latest intraday technical analysis on the latest intraday technical analysis on US Wall Street 30, US Nas 100, US SPX 500, Hong Kong 33, Japan 225, Germany 30, EUR/USD, GBP/USD, AUD/USD, USD/JPY, Gold (XAU/USD), and West Texas Oil.
