(Bloomberg) — Asian shares rose, led by Japan, after the central bank eased concerns over plans to offload its massive exchange-traded fund holdings.
The Nikkei-225 Index jumped 1.3% after the Bank of Japan’s comments on ETF sales spooked the markets Friday. The yen weakened. Shares in Australia and South Korea also rose while Hong Kong lagged. US equity-index futures slipped 0.1% as traders weighed the impact on the tech industry from the sharp increase in H-1B visa application fees.
A gauge of the dollar edged up 0.1%, extending its gains into a fourth day. Treasuries edged lower with the yield on the 10-year rising one basis point to 4.14%. Oil rose 0.5% after notching a modest drop last week.
A large overhang that had threatened the Japanese equity market was eased after the central bank unveiled a century-long plan to offload its massive exchange-traded fund holdings. Sentiment also improved after US President Donald Trump touted progress on China-related issues and said he would meet Xi Jinping following a call between the two leaders.
“The Trump-Xi phone call keeps momentum toward additional deals from their in-person summit,” said Homin Lee, a senior macro strategist at Lombard Odier Singapore Ltd. The meeting “reinforces the expectation of continued trade ceasefire between the US and China.”
Trump said he would meet with Xi on the sidelines of the upcoming Asia-Pacific Economic Cooperation summit. Trump hailed progress on a deal to keep the TikTok app running in the US. While the Chinese readout of the call struck a measured tone, Xi expressed confidence that Washington and Beijing could handle issues that arose between their countries.
Wall Street closed out the highly anticipated Federal Reserve week with stocks notching fresh all-time highs as prospects for more rate cuts bolstered the outlook for corporate earnings.
“Discussion of ‘bubbles’ has officially entered the market dialogue – if the S&P 500 is in one, how far to go – and intensified with September’s rally bucking seasonal volatility,” said Julian Emanuel, strategist at Evercore ISI, in a note Sunday. “But a bubble has a long way to go.”
Evercore sees 25% odds of a bubble scenario — SPX 9,000 by year-end 2026 — versus 7,750 base case.
What Bloomberg strategists say…
Global stocks are primed for another positive week with US interest rates set to march lower. Further positives will come from the plan for a meeting between Presidents Trump and Xi on the sidelines of the upcoming APEC summit, with the continuation of a tariff truce between the two nations a key driver for market sentiment to remain upbeat.
—Mark Cranfield, MLIV strategist. For full analysis, click here.
On Friday, Trump also called for a sweeping overhaul of the H-1B visa program, including a $100,000 application fee. The move rattled companies that have long depended on the program to recruit global talent, particularly in California’s tech-heavy economy, where employers rely on skilled computer programmers, data analysts and engineers.
The move may inject fresh uncertainty into global markets. Pressure may be most acute in India and its $280 billion IT sector that’s already grappling with sluggish growth and tensions between Prime Minister Narendra Modi and Trump.
It’s “hard to escape the idea it’s not aimed at Modi and India,” said Tony Sycamore, an analyst at IG in Sydney.
Traders this week will parse a swath of data including activity readings in Europe and the Fed’s preferred measure of inflation. Fed Chair Jerome Powell is also due to speak on the outlook for the economy on Tuesday, after last week he pushed back against expectations of rapid rate cuts.
Corporate News:
Samsung Electronics Co. shares jumped to their highest in more than a year after reports the Korean chipmaker has won long-awaited approval from Nvidia Corp. for its high-bandwidth memory chips. Singapore Telecommunications Ltd. faces a fresh crisis at its Australian division Optus after the government started an investigation into an emergency call outage that resulted in multiple deaths. SingTel shares fell as much as 1.6%. Trump administration officials plan to link the active ingredient in Tylenol to autism Monday, the Washington Post reported, citing unnamed people familiar with the matter. Asia-listed Apple suppliers saw their shares rise after the US firm’s latest iPhone release was met with high shopper turnout, helping Apple’s stock climb more than 3% on Friday. Some of the main moves in markets:
Stocks
S&P 500 futures fell 0.1% as of 10:47 a.m. Tokyo time Japan’s Topix rose 0.9% Australia’s S&P/ASX 200 rose 0.3% Hong Kong’s Hang Seng fell 0.7% The Shanghai Composite was little changed Euro Stoxx 50 futures were unchanged Currencies
The Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1737 The Japanese yen fell 0.1% to 148.14 per dollar The offshore yuan was little changed at 7.1159 per dollar Cryptocurrencies
Bitcoin fell 0.6% to $114,682.29 Ether fell 2.9% to $4,346.91 Bonds
The yield on 10-year Treasuries advanced one basis point to 4.14% Japan’s 10-year yield advanced 1.5 basis points to 1.650% Australia’s 10-year yield advanced three basis points to 4.27% Commodities
West Texas Intermediate crude rose 0.5% to $63.02 a barrel Spot gold rose 0.1% to $3,689.32 an ounce This story was produced with the assistance of Bloomberg Automation.
–With assistance from Matthew Burgess, Abhishek Vishnoi and Winnie Hsu.
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