Asia stocks head for monthly gains on US trade deal hopes; Nikkei hits 1-yr high

Investing.com– Most Asian stocks rose on Monday and headed for sharp monthly gains, supported by hopes of trade deals with U.S. President Donald Trump, while attention for the day was on factory activity data from China, Japan, and South Korea.

Japan stocks were the top gainer for the day, with the benchmark index jumping to near a one-year high.

Regional equities also took cues from Wall Street. Major U.S. stock indexes saw weekly gains on Friday, with the S&P 500 and Nasdaq hitting record closing highs.

Wall Street futures edged higher in Asian trading hours on Monday.

Nikkei at 1-yr high; Asia stocks set for monthly rise

Japan’s Nikkei 225 jumped 1.6% to its highest level since mid-July, boosted by tech stocks. The broader TOPIX index gained 1%.

The Nikkei was poised to rise 8% in June, marking its third straight monthly gain, buoyed by a weaker yen.

Elsewhere, markets lacked clear direction on Monday but remained on track for monthly gains, supported by hopes that Asian economies will secure trade agreements with President Trump ahead of the July 9 tariff deadline. 

Sentiment was also buoyed by last week’s announcement that the U.S. had finalized a trade deal with China, finalizing the terms outlined in Geneva talks last month.

Meanwhile, a ceasefire between Israel and Iran brokered by U.S. President Trump eased fears of supply-chain disruptions that had pressured global markets. 

China’s Shanghai Composite index rose 0.3%, while the Shanghai Shenzhen CSI 300 gained 0.1%.

Both indices were set to gain over 2% for June.

Hong Kong’s Hang Seng declined 0.6% on Monday but was set to gain 3.5% this month.

South Korea’s KOSPI rose 0.8%, and was on track for stellar monthly gains of more than 14%. 

Australia’s S&P/ASX 200 rose 0.4%, heading for its third consecutive monthly rise.

Singapore’s Straits Times Index was largely muted on Monday, while futures tied to India’s Nifty 50 edged 0.1% higher.

Factory data from China, Japan, S. Korea shows tariff impact

Data on Monday showed that China’s manufacturing sector shrank at a milder-than-expected pace in June, as domestic producers continued to struggle with weak external demand and elevated U.S. trade tariffs.

In Japan, data showed that factory output grew at a much slower pace than expected in May amid weaker external demand, primarily due to U.S. tariffs on automobiles.

Meanwhile, South Korea’s industrial output declined for a second straight month in May.