nikkei soars as us-china trade hopes fuel rally
Tokyo, Monday, 12 May 2025.
tokyo’s nikkei average jumped for the third straight session, closing at 37,644.26 yen. Optimism surrounding us-china tariff negotiations drove the surge. The tokyo stock price index also climbed for its twelfth consecutive day. This matched a record from october 2017. us treasury secretary bessent hinted at progress in trade talks held in switzerland. Select stocks, including softbank group and toyota, experienced gains amid the positive market sentiment.
market overview
The Nikkei’s rise of 140.93 yen represented a 0.374 percent increase from the previous week’s close [1]. This surge brought the Nikkei to its highest level since March 27, 2025 [1]. The TOPIX also saw significant gains, increasing by 8.59 points, or 0.31%, to reach 2742.08, marking its best level since March 28, 2025 [1]. The JPX Prime 150 Index mirrored this positive trend, rising by 0.99 points to close at 1210.73 [1]. Trading volume on the Tokyo Stock Exchange Prime market reached approximately 4.8542 trillion yen, with 2.15238 billion shares changing hands [1].
analyst perspectives
Market analysts suggest that the Nikkei’s upward momentum is likely to continue, supported by optimism surrounding US-China trade negotiations [4]. Reuters reported that the Nikkei is expected to continue its rise, fueled by hopes of progress in US-China trade discussions [4]. The report anticipates a potential test of the 38,000 yen mark, though it cautions that selling pressure may intensify near this level, requiring additional positive catalysts for further gains [4]. According to Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management, the Nikkei appears to have a firm base, bolstered by expectations of progress in the trade talks [4].
us-china trade talk implications
The positive momentum in the Tokyo market is largely attributed to signals of advancement in US-China trade negotiations [1]. Bessent, the US Treasury Secretary, indicated substantial progress in ministerial-level tariff discussions held in Switzerland [1][4]. Echoing this sentiment, Chinese Vice Premier He Lifeng stated that both parties had reached ‘important consensus’ and agreed to establish a new framework for economic dialogue [4]. The anticipation of a joint statement further fueled positive market sentiment [4]. This development has eased investor concerns regarding potential escalation of trade tensions, fostering a more favorable environment for investment [5].
market outlook
Looking ahead, the Nikkei is expected to maintain its upward trajectory, potentially reaching around 37,900 yen [5]. This forecast is based on the expectation that improved investor sentiment, driven by the prospect of eased US-China trade tensions, will encourage buying across a broad spectrum of stocks [5]. A weaker yen, trading near 146 per dollar, is also expected to provide additional support to the market [6]. Investors should monitor developments in US-China trade relations and upcoming corporate earnings reports, as these factors will likely influence market direction in the near term [3].