Stocks Increase as Japan Rallies and Trade Tensions Reduce – Asia Market Wrap

Asian markets rose above their record closing high as hints of easing trade tensions lifted optimism following recent volatility linked to fears about US regional banks.

MSCI’s regional stock index rose 1.7%, with futures indicating increases in the US and Europe. Japanese stocks rose over 3%, and the currency recovered on predictions that pro-stimulus Takaichi would be elected as Japan’s next prime minister. Chinese stocks rose as investors overlooked statistics indicating that economic growth has slowed to its slowest level in a year.

Treasuries fell throughout the curve, with the 10-year yield jumping one basis point to 4.01%. The Dollar index remained unchanged, as oil fell after marking its third.

French bond futures fell after S&P Global Ratings downgraded France to A+ from AA-, citing “elevated” budget uncertainty. France has now lost its double-A grade from two of the three major credit rating agencies in less than a month, potentially compelling some investors with stringent investment criteria to sell the country’s assets.

In global news, Israel launched attacks against Hamas in Gaza and allegedly halted all humanitarian shipments on Sunday, accusing Hamas of a fatal Palestinian ambush that killed two troops.