Global Stocks Surge on Trump's Softer Tariff Stance, BOJ Rate Hike

Tokyo, Japan - Global equity markets extended their rally for a ninth consecutive day, poised for a record high, spurred by US President Donald Trump's comments suggesting a more conciliatory approach toward China tariffs. The Japanese yen also strengthened after the Bank of Japan (BOJ) raised interest rates.

China Equity Surge, Dollar Weakens

A gauge of Chinese equities in Hong Kong jumped significantly, while the US dollar weakened and the yuan extended gains. Trump stated in a Fox News interview that he would prefer to avoid tariffs against China.

Royal Bank of Canada Analyst Perspective

"Price action will remain volatile as negotiations may not guarantee success," said Alvin Tan, an FX strategist at Royal Bank of Canada. "However, the situation is moving away from the worst-case scenario regarding US tariffs."

Australian Dollar Gains, Caution Advised

The Australian dollar, often viewed as a proxy for China, strengthened by 0.7%. However, Chang Shu, Chief Asia Economist for Bloomberg Economics, advised caution in interpreting Trump's comments.

"It could signal a willingness to negotiate before resorting to massive tariffs," said Shu. "Yet, it remains uncertain whether Trump will fully back down."

Japanese Yen Appreciates Post-BOJ Rate Hike

The Japanese yen strengthened against the US dollar after the BOJ raised interest rates for the first time since July. Yields on two-year and five-year government bonds reached their highest levels since 2008. The Topix stock index fluctuated.

BOJ Signals Faster Inflation, Further Hikes Possible

The BOJ projected a faster pace of inflation in the coming years. It also indicated that if this outlook materializes, it will continue raising interest rates. Investors will closely monitor BOJ Governor Kazuo Ueda's press conference for hints about the future hiking schedule.

Asian Stocks Extend Gains, US Equities Steady

An index tracking Asian stocks headed for its second consecutive week of gains, aided by a rebound in technology shares that propelled Wall Street to a new high. MSCI's all-country share index is on track for its longest nine-day winning streak in over a year. S&P 500 futures were steady, while European futures rose. The 10-year Treasury yield edged lower.

Market Optimism for Trump's Measures

In the US, optimism persists that the Trump administration may implement measures to bolster growth and stocks while controlling inflation, allowing the Federal Reserve to maintain its monetary easing stance.

Corporate News

Mitsubishi Motors Corp. shares declined after Japanese media reported that it will not participate in the merger plans between Honda Motor Co. and Nissan Motor Co. Banca Monte dei Paschi di Siena SpA, an Italian lender, is exploring a potential deal with Mediobanca SpA.

Upcoming Key Events

* Eurozone HCOB Manufacturing & Services PMI (Friday)
* US University of Michigan consumer sentiment, existing home sales, S&P Global Manufacturing & Services PMI (Friday)

Market Movements

* S&P 500 futures: Little changed
* S&P/ASX 200 futures: Up 0.4%
* Japan's Topix: Little changed
* Hong Kong's Hang Seng: Up 2.1%
* Shanghai Composite: Up 0.7%
* Euro Stoxx 50 futures: Up 0.4%
* Bloomberg Dollar Spot Index: Down 0.4%
* Euro: Up 0.4% to $1.0453
* Japanese yen: Up 0.5% to 155.26 per dollar
* Offshore yuan: Up 0.6% to 7.2440 per dollar
* Bitcoin: Up 1.8% to $104,987.65
* Ether: Up 4.8% to $3,405.49
* 10-year Treasury yield: Down two basis points to 4.62%
* 10-year Japanese yield: Up two basis points to 1.225%
* 10-year Australian yield: Little changed at 4.48%
* West Texas Intermediate crude: Little changed
* Spot gold: Up 0.8% to $2,777.28 an ounce