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The Nikkei 225 crossed above 50,000 for the first time on Monday. The benchmark index closed at 50,051.11, up 751.46 points or 1.52%.
The move came as investors reacted to progress in U.S.-China trade discussions and strong performance from U.S. markets.
The Topix also moved higher, rising by 1.61%. Traders described the move as driven by external momentum and expectations of domestic policy changes inside Japan.
Japanese Prime Minister Sanae Takaichi is set to meet U.S. President Donald Trump this week during his trip to Japan.
According to a note released Monday by Crédit Agricole CIB, “It is expected that the message she would convey is to significantly expand domestic demand through a high-pressure economy.”
The same note said that an expansion of domestic demand could “completely lift Japan out of its deflationary structural stagnation” and also reduce the U.S. trade deficit.
The note called the potential outcome “a win-win for both countries.” Markets took this as a signal that Tokyo may move in a direction that supports growth at home while smoothing trade friction with Washington.
Asian markets respond to global momentum
Markets across Asia moved higher in trading. South Korea’s Kospi climbed 1.83% after reaching a record high on Friday. The Kosdaq rose 0.72%. Hong Kong’s Hang Seng Index futures pointed to a stronger open, trading at 26,256 compared to the previous close of 26,160.15.
In Australia, the S&P/ASX 200 was higher by 0.54%, trading at 9,060.70, up 41.70 points. Other regional levels included: Hang Seng Index 26,160.15, Kospi 4,001.24 up 59.65 or 1.51%, Nifty 50 25,795.15 unchanged, and Shanghai 3,950.175, unchanged after a small move of -0.137.
The regional moves followed reports that U.S. and Chinese negotiators created a framework resolving several areas of dispute. This creates a path for Trump and Chinese President Xi Jinping to formally approve the terms.
In an interview on Sunday with CBS News, U.S. Treasury Secretary Scott Bessent said that Trump’s proposed 100% tariffs on imports from China are now “effectively off the table.”
He also said that China is expected to increase soybean purchases and delay broad restrictions on rare earth exports. Bessent stated that the U.S. will continue its current export controls on China.
The rally in Asia also followed significant gains on Wall Street. On Friday, all three major U.S. indices finished at record highs.
The Dow Jones Industrial Average gained 472.51 points, or 1.01%, closing at 47,207.12, its first close above 47,000. The S&P 500 rose 0.79% to 6,791.69, and the Nasdaq Composite increased 1.15% to 23,204.87.
Investors are now waiting for the Federal Reserve decision on interest rates, where a rate cut is widely expected. Traders are also preparing for Big Tech earnings due this week.
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