Asia report: Markets rise on US-China truce extension, RBA cut

(Sharecast News) - Asia-Pacific equities were mixed on Tuesday, with Japan's Nikkei 225 surging to a record high after the United States and China extended their tariff truce, giving the world's two largest economies more time to negotiate a trade deal. The Reserve Bank of Australia's latest interest rate cut further influenced investor sentiment.

"Stocks increased as investor confidence rose after President Donald Trump expressed openness to allowing US companies to resume some chip sales to China and prolonged a trade truce with Beijing," said TickMill market strategy partner Patrick Munnelly.

"Earlier, Trump indicated he would consider permitting Nvidia to sell a limited version of its most advanced AI chip to China.

"Asian technology shares experienced an upswing on Tuesday, particularly among chipmakers like Advantest."

Munnelly noted that Micron Technology's optimistic outlook and indications of reduced tensions at Intel as well bolstered sentiment.

"Japan's Nikkei-225 index stood out ... as SoftBank soared.

"The yen declined for the third straight session while a measure of the dollar fell by 0.1%."

Most markets rise on US-China truce extension

In Tokyo, the Nikkei 225 jumped 2.14% to 42,715.50, led by sharp gains in Mitsui Mining and Smelting, up 12.89%, Yokohama Rubber, up 11.43%, and Sharp, up 11.04%.

The broader Topix advanced 1.39% to 3,066.37.

China's markets also rose, with the Shanghai Composite gaining 0.5% to 3,665.92 and the Shenzhen Component up 0.53% at 11,351.63.

Shaanxi Construction Machinery climbed 10.14%, JiShi Media rose 10.1% and Xinjiang Ba Yi Iron & Steel added 10.09%.

Hong Kong's Hang Seng Index edged 0.25% higher to 24,969.68, supported by SMIC, which rose 5.03%, Zhongsheng Group, up 4.01%, and Orient Overseas International, up 3.13%.

In South Korea, the Kospi 100 slipped 0.3% to 3,232.69, weighed by declines in Doosan Enerbility, down 5.62%, Hyundai Electric Energy, off 4.82%, and Sam Yang Foods, down 3.53%.

Australia's S&P/ASX 200 added 0.41% to 8,880.80, with JB Hi-Fi rising 5.58%, CAR Group up 5.03%, and Insurance Australia Group gaining 3.91%.

Across the Tasman Sea, New Zealand's S&P/NZX 50 fell 1.18% to 12,759.68, dragged lower by Vista Group International, down 5.14%, Ryman Healthcare, off 3.69%, and Mainfreight, down 2.89%.

In currency markets, the dollar strengthened 0.21% against the yen to trade at JPY 148.46, as it added 0.37% against the Aussie to AUD 1.5411, and strengthened 0.3% on the Kiwi to change hands at NZD 1.6890.

Oil prices were firmer, with Brent crude futures last up 0.33% on ICE at $66.85 per barrel, and the NYMEX quote for West Texas Intermediate adding 0.19% to $64.08.

RBA cuts interest rates as expected

At the top of the region's economic agenda was Australia's central bank, which lowered its benchmark interest rate by 25 basis points, taking it to 3.6%, the lowest level since April 2023.

The move, which matched economists' expectations in a Reuters poll, was aimed at supporting economic growth as inflation remains subdued.

Policymakers said the cut was intended to provide further stimulus to an economy showing signs of slowing.

In Singapore, the Ministry of Trade and Industry raised its 2025 GDP growth forecast to a range of 1.5% to 2.5%, up from its previous 0% to 2% projection.

The revision followed stronger-than-expected economic performance in the first half of the year, when GDP grew 4.4% in the second quarter after a 4.1% expansion in the first.

It said the new forecast implied growth of between -1.2% and 0.9% year-on-year in the second half, reflecting anticipated weakness amid uncertainty over US trade policy.

Reporting by Josh White for Sharecast.com.