Stocks climbed in Asia on Monday as investors anticipated the second round of U.S.-China trade talks in London later in the day.
Tokyo’s Nikkei 225 rose 1.1%, closing at 38,137.09, even after the government said Japan’s economy shrank by 0.2% in the January–March quarter. In Seoul, South Korea’s Kospi jumped 1.9% to 2,865.52.
Chinese markets edged higher despite a slowdown in exports: foreign sales grew 4.8% in May from a year earlier, down from over 8% growth in April, and shipments to the United States fell almost 10% year-on-year.
Consumer prices in China dipped 0.1% in May, marking the fourth straight month of deflation. Hong Kong’s Hang Seng added 1.4%, ending at 24,119.64, and Shanghai’s Composite rose 0.4% to 3,397.13. Australia’s markets were closed for a public holiday.
The U.S. economy contracted in the first quarter
On Tuesday, the Organization for Economic Cooperation and Development forecast 1.6% U.S. economic growth for 2025, down from 2.8% last year.
The dollar slipped against major currencies on Monday as traders weighed Friday’s upbeat job report against caution ahead of the London trade meetings. Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick and Trade Representative Jamieson Greer are set to lead the U.S. side, while China is expected to send Vice Premier He Lifeng.
After Friday’s data, the dollar saw some gains, cutting its weekly losses in the dollar index by more than half, though it remains down over 8.6% for the year.
On Monday, the yen strengthened 0.31% to 144.425 per dollar after news of Japan’s smaller-than-expected economic contraction and comments from Prime Minister Shigeru Ishiba on interest rates.
The euro inched up 0.18% to $1.1417 amid bets on a hawkish European Central Bank. The Swiss franc rose 0.17% to 0.8209 per dollar, and sterling added 0.27% to $1.3555.
The dollar index eased 0.07% to 99.045 as U.S. Treasury yields dipped slightly after Friday’s jump.
Separately, reports said Japan’s chief trade negotiator, Ryosei Akazawa, plans a sixth round of talks in Washington.
Oil held prices from last week
Oil prices held onto last week’s gains early on Monday as investors awaited U.S.-China trade talks in London later in the day.
Brent crude futures were unchanged at $66.47 a barrel at 00:08 GMT, while U.S. West Texas Intermediate rose by 1 cent to $64.59. Traders said hopes for a trade agreement between Washington and Beijing outweighed concerns about growing supply from OPEC+ after the group approved another large output increase for July on May 31.
Three of President Donald Trump’s top aides were set to meet their Chinese counterparts on Monday for the first session of the U.S.-China economic and trade consultation mechanism. Market watchers expect any progress toward a deal to boost economic growth and oil demand.
Still, analysts warn that rising OPEC+ output could put pressure on prices later this year. In a research note on Friday, HSBC projected that accelerated supply hikes in August and September would raise downside risks to its forecast of $65 per barrel for Brent in the fourth quarter of 2025. Capital Economics researchers added that they see this “new faster pace of production rises” from OPEC+ as a lasting trend.
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