The phone call between Japanese Prime Minister Shigeru Ishiba and US President Donald Trump has raised hopes of reaching a tariff agreement, and the Japanese stock market rebounded as a result.
In early trading in Tokyo, the Topix index rose as much as 7.2% to 2,452.78, while the Nikkei 225 stock average climbed as much as 6.8% to 33,257.16. Both indexes saw their biggest intraday gains since August.
As Wednesday’s deadline approaches, the market is optimistic that Japan may reach a trade deal with the US to avoid a 24% tariff. Since the tariff was announced on April 2, both stock indices have fallen by more than 7%.
Kazuhiro Sasaki, head of Japan research at Phillip Securities, said: “Yesterday, people felt the market was oversold and investors were looking for a catalyst to buy again.”
Sasaki said that Ishiba’s phone call with Trump and the subsequent statement by US Treasury Secretary Scott Bessent that Japan might be a key point in the tariff negotiations were both seen as signs that “the negotiations are moving in the right direction.” This gave investors some reassurance and drove the stock prices to rebound.
Electronic product manufacturers and other exporters have contributed the most to the rise of the Tokyo Stock Exchange Index, and the recent depreciation of the yen against the US dollar has also driven this increase. The yen fell in the previous two trading days but rose 0.3% on Tuesday to 147.47 yen per US dollar. The share price of Hitachi Ltd. once rose by 15%.
Bank stocks also rose, with the TOPIX banking sub-index climbing more than 11%. Shares of Mitsubishi UFJ Financial Group once rose 13%, marking the biggest gain since August 6, when the market rebounded from a sharp fall triggered by the Bank of Japan’s unexpected interest rate hike. Mizuho Financial Group and Sumitomo Mitsui Financial Group also rose more than 11% on Tuesday.
As expectations of negotiations possibly easing the economic blow from tariffs have alleviated risk aversion, the yield on Japan’s benchmark 10-year bond rose by about 11 basis points to 1.215%.
The Hang Seng China Enterprises Index rose 3.7% on Tuesday, rebounding from a 13% plunge on Monday that sent it into bear market territory. The index rebounded after US President Donald Trump threatened to impose an additional 50% tariff on Chinese imports and Beijing vowed to “fight to the end”.
Amid coordinated measures taken by Beijing to prevent a stock market crash, eight exchange-traded funds (ETFs) favored by the so-called “national team” saw a record net inflow of 42 billion yuan on Monday.
Chinese officials have been discussing the early introduction of potential stimulus measures to counter the impact of tariffs. If the authorities are determined to stabilize the Chinese stock market, then continuous intervention measures may be needed this week.
The People’s Bank of China said on Tuesday that it will provide sufficient re-lending support to China Investment Corporation when necessary to maintain the stable operation of the capital market. Additionally, a regulatory official stated that the upper limit on the proportion of stocks in the asset allocation of insurance companies will be raised.
Rebecca Sin, an ETF analyst at Bloomberg Intelligence, said that sovereign funds seem “willing to do whatever it takes to support the market.” “The ‘national team’ can ease short-term volatility because they have abundant funds and unlimited resources.”
Enterprises have also joined the ranks of supporting stock prices. Many listed companies announced share buyback plans after the stock market plunged on Monday.
Technical analysis:
Gold: Although the price did not stop falling in the green zone yesterday, it refreshed the liquidity in the yellow zone and then rebounded as expected. For today, we suggest continuing to take advantage of the bullish signal left by the new bullish engulfing pattern and attempt to go long. For detailed positions, please consult the plugin.
(Gold 15-minute chart)
The plugin is updated from 12:00 to 13:00 every trading day. If you want to experience the same plugin as shown in the chart, please contact V: Hana-fgfg.
The Nasdaq: After the overnight price refreshed the liquidity above the yellow zone, there was a relatively rapid pullback. However, the price has since consolidated and may seek a new direction to break through intraday. We suggest first paying attention to the upward breakout momentum signal; in addition, if there is a downward breakout, we recommend maintaining 1-2 attempts at short-term buying. For detailed positions, please consult the plugin.
(NASDAQ 15-minute chart)
The plugin is updated from 12:00 to 13:00 every trading day. If you want to experience the same plugin as shown in the chart, please contact V: Hana-fgfg.
Crude oil: As Trump’s comprehensive tariffs are rolled out, market concerns over a US economic recession have intensified. If the latter were to occur, it would affect the total demand for crude oil. Therefore, the price has begun to seek support downward. Currently, the trend on the 4-hour chart is still under downward pressure, and bulls should observe appropriately. In the short term, it may continue to maintain a volatile and slightly downward trend. For detailed positions, please consult the plugin.
(Crude Oil 15-Minute Chart)
The plugin is updated from 12:00 to 13:00 every trading day. If you want to experience the same plugin as shown in the picture, please contact V:Hana-fgfg.
Today’s key financial data and events to focus on:
At 17:00, Luis de Guindos, the Vice President of the European Central Bank, delivered the closing speech at the annual meeting of the Spanish Banking Association.
18:00 US March NFIB Small Business Confidence Index
20:55 US Redbook Commercial Retail Sales (YoY) Last Week
21:00 ECB Governing Council member Holzmann is scheduled to speak.
22:00 Canada March Unadjusted Ivey Purchasing Managers’ Index
