Asian Markets and US Futures Experience Gains Amid Trade Talk Hopes

Singapore: Equity markets in Asia, alongside U.S. futures, saw an upswing on Friday. This positive movement was fueled by indications of potential discussions on trade between the United States and China, which boosted investor confidence. This occurred even after underwhelming earnings reports from major tech firms like Apple and Amazon had sparked concerns about the consequences of tariffs.

China’s Ministry of Commerce communicated on Friday that the U.S. side has consistently voiced a readiness to engage in tariff negotiations and that Beijing is open to such dialogues.

These remarks played a role in reversing the course of U.S. stock futures, which had previously declined after Apple scaled back its share repurchase program and cautioned that tariffs could add approximately $900 million to its costs in the current quarter.

Futures contracts for the S&P 500 index increased by 0.6%, while those for the Nasdaq saw a rise of 0.3%. Japan’s Nikkei index advanced by 1% due to a weaker yen, and Taiwanese stocks experienced a surge of 2%.

MSCI’s broadest index of Asia-Pacific shares, excluding Japan, recorded a gain of 0.4%.

Matt Simpson, a senior market analyst at City Index, commented, “They’ve adopted a cautious stance, insisting that the U.S. ‘demonstrate sincerity’ if they desire trade negotiations. So, while an olive branch has been extended, it’s hardly a situation where China has ‘come crawling’ as Trump might have hoped.”

Nevertheless, the comments boosted investor morale as markets navigate the unpredictable tariff policies of President Donald Trump, which have triggered anxieties about a potential significant global economic downturn.

Recent data revealed that the U.S. economy contracted in the first quarter for the first time in three years, while China’s factory activity experienced its most rapid contraction in 16 months in April.

Joseph Capurso, who heads international and sustainable economics at Commonwealth Bank of Australia, stated that the primary economic impact of tariffs will be felt when consumer prices rise.

“A recession will become likely if the price increases encourage consumers to cut spending and businesses to shrink workforces and cut capital spending. While a recession is not our baseline, it will be a close call this year.”

The current earnings season has highlighted the impact of the swiftly changing U.S. trade policy, with numerous companies reducing or withdrawing their profit forecasts.

Although investors were disappointed by the earnings reports from Apple and Amazon, robust results from Microsoft and Meta Platforms earlier in the week had raised expectations that the tech sector could withstand the tariff pressures.

In currency markets, the Japanese yen weakened to its lowest level since April 10 on Friday, following the Bank of Japan’s decision to lower growth forecasts due to U.S. tariffs and maintain interest rates. It last traded at 145.62 per dollar.

Fred Neumann, HSBC’s chief Asia economist, suggested that uncertainty surrounding tariffs could indirectly impede Japan’s economic growth.

“The BOJ is keeping the door open for further rate hikes, but at this point the door is only slightly ajar.”

This positioned the U.S. dollar for its strongest weekly performance since late February, ahead of the crucial non-farm payrolls data due later in the day.

The dollar index, which evaluates the U.S. currency against six other currencies, was last recorded at 100.14.

A survey of economists by Reuters indicated that nonfarm payrolls likely increased by 130,000 jobs last month, following a rise of 228,000 in March.

Japanese Finance Minister Katsunobu Kato stated on Friday that Japan’s substantial holdings of over $1 trillion in U.S. Treasury bonds are among the tools Tokyo can use in trade negotiations with the United States.

The statement came as Ryosei Akazawa, Japan’s chief trade negotiator, engaged in a second round of bilateral tariff discussions with U.S. Treasury Secretary Scott Bessent in Washington.

In the commodities market, gold prices declined to $3,234.9 per ounce and are on pace for their weakest weekly performance in two months due to diminished safe-haven demand.

Oil prices surged after Trump threatened additional sanctions on Iran. Brent crude futures rose 0.56%, while U.S. West Texas Intermediate crude futures gained 0.6%.