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What’s happening: Japanese stock markets closed higher on Tuesday, with the broader Topix Index approaching an eight-month high.
What happened: The positive momentum in Japanese markets followed overnight gains on Wall Street, driven by prospects of US President Donald Trump taking a narrower approach to tariffs.
Japan’s equity markets also received a boost from weakness in the yen, which makes local assets more appealing to overseas investors.
Why it matters: Japan’s stock market snapped its three-session losing streak on Tuesday during which the Nikkei 225 had tumbled around 240 points. The index hit the 37,780 level on Tuesday and extended gains this morning.
Meanwhile, minutes from the Bank of Japan’s recent policy meeting signalled that the central bank’s members remained open to more rate hikes, considering inflation and wage growth trends.
One official signalled that the rate might rise to 1% during the second half of the year. Last week, the Bank of Japan kept its policy rate unchanged at 0.5%, with officials keeping a cautious approach, given global economic and geopolitical uncertainty.
Export-heavy firms in Japan recorded gains, with shares of Disco, Fujikura and Toyota Motor settling higher on Tuesday.
The Nikkei 225 rose during Tuesday’s session amid mixed performances from tech, financial and automobile producer stocks.
Japan’s Nikkei 225 gained 0.46% to settle at 37,780 on Tuesday, while the broader Topix Index added 0.24% to reach 2,798.
The Nikkei 225 rose further by around 0.5% this morning, recording gains for the second straight session, with consumer and tech stocks among the top performers.
What to watch: Investors await the release of economic data on Tokyo CPI, housing starts and construction orders from Japan on Friday. Tokyo CPI, which eased to 2.9% in February from 3.4% in January, is expected to increase to 3.1% in March.
Japan’s housing starts, which declined by 4.6% year-over-year in January, are expected to decline by 0.8% in February. Analysts expect construction orders to surge 15% year-over-year in February, following a 12.2% rise in the previous month.
Context: The CAD/USD forex pair edged higher this morning amid strength in crude oil prices.
Details: Investors turned slightly more optimistic about US President Donald Trump adopting a more moderate approach to tariffs, which eased concerns over potential disruption to Canadian businesses.
Data released earlier during the week showed manufacturing sales in Canada declining by 0.2% in February, after 1.7% growth in the previous month. Canada’s CFIB Business Barometer long-term index shed 24.8 points to hit a record low of 25.0 in March.
Higher prices for crude oil, one of Canada’s major exports, lent support to the loonie this morning. WTI crude oil prices gained around 0.5% to trade at $69.33 a barrel.
Strength in the greenback weighed on the CAD/USD forex pair. The US dollar index, which measures the greenback’s performance versus a basket of major peers, edged higher to 104.21 this morning.
The CAD/USD pair rose slightly to 1.4279. The S&P/TSX Composite Index gained 0.14% to close at 25,339.51 on Tuesday, receiving support from commodity producers, as geopolitical and tariff concerns sent oil and gold prices higher.
What to watch: Investors await the release of economic data on Canada’s wholesale sales (1630 UAE Time) today. Wholesale sales in Canada, which grew by 1.2% in January, are expected to contract by 0.2% in February.
Other Markets: US trading indices closed mostly higher on Tuesday, with the Dow Jones index, S&P 500 and Nasdaq 100 up by 0.01%, 0.16% and 0.53%, respectively.
The US announced that it has reached separate deals with Russia and Ukraine for a ceasefire in the Black Sea. The news sent the RUB/USD pair slightly higher in forex trading this morning.
Australia’s monthly Consumer Price Index rose 2.4% year-over-year in February, versus January’s four-month high of 2.5%. The latest reading coming in better than market estimates of 2.5% lent support to the AUD/USD forex pair.
UK’s Confederation of British Industry’s retail sales gauge fell by 18 points to a reading of -41.0 in March. This being the weakest reading since April 2024 sent the GBP/USD pair lower in forex trading this morning.
Hong Kong’s trade deficit shrank to $36.3 billion in February, from $41.7 billion in the year-ago period, lending some support to the HKD/USD forex pair.
South Korea’s Business Survey Index for the manufacturing sector increased to 68 in March, from 65 in February. However, the KRW/USD pair fell in forex trading this morning.
Spain’s GDP growth rate (1200 UAE Time), European Central Bank’s non-monetary policy meeting (1200 UAE Time), France’s unemployment benefit claims (1500 UAE Time) and jobseekers total (1500 UAE Time), US MBA mortgage applications (1500 UAE Time), durable goods orders (1630 UAE Time), EIA crude oil stocks change (1830 UAE Time), EIA gasoline stocks change (1830 UAE Time), EIA distillate stocks change (1830 UAE Time) and EIA heating oil stocks change (1830 UAE Time), Brazil’s current account (1530 UAE Time) and foreign direct investment (1530 UAE Time), as well as Russia’s corporate profits (2000 UAE Time) and industrial production (2000 UAE Time).
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