By Willa Plank
Global stocks kicked off the week on a positive note, with markets in Asia extending gains, as recent actions by President Donald Trump helped soothe investor worries about ties between the U.S. and its key Asian trading partners.
Japan’s Nikkei Stock Average /zigman2/quotes/210597971/delayed JP:NIK -0.78% was up 0.6% early Monday, Australia’s S&P/ASX 200 /zigman2/quotes/210598100/delayed AU:XJO -1.54% added 0.6%, Hong Kong’s Hang Seng Index /zigman2/quotes/210598030/delayed HK:HSI +0.59% rose 0.3% and the Shanghai Composite Index /zigman2/quotes/210598127/delayed CN:SHCOMP +1.74% gained 0.4%.
At a joint appearance over the weekend with Japanese Prime Minister Shinzo Abe, Trump said that the “United States of America stands behind Japan, its great ally, 100%,” following the launch of a ballistic missile by North Korea that landed in the Sea of Japan.
Those comments by Trump came not long after he spoke with Chinese President Xi Jinping and affirmed he would abide by the “One China” policy that has underpinned Sino-American relations for many years.
“It looks all handshakes and hugs between Trump and Abe…they were showing a very united front,” said Chris Weston, chief market strategist at IG.
Japanese stocks were higher at Monday’s opening after the yen retreated further against the U.S. dollar, with auto stocks leading.
Among key auto-export stocks, Honda Motor /zigman2/quotes/200490352/delayed JP:7267 -1.50% was up 1.0% and Subaru maker Fuji Heavy /zigman2/quotes/203522406/delayed JP:7270 -1.55% added 0.9%. Energy stocks were also higher as oil prices advanced during U.S. trading on Friday; oil explorer Inpex /zigman2/quotes/206689846/delayed JP:1605 -3.29% climbed 5.8%.
The Nikkei’s gains come despite a slight slowdown in economic growth for Japan in the fourth quarter. Japan’s real gross domestic product grew 1.0% on an annualized basis in the three months through December, according to data released Monday. The expansion was smaller than a forecast of 1.1% growth by economists surveyed by The Wall Street Journal.
Still, the Japan GDP data isn’t worrying the market, said Andrew Sullivan, managing director of sales trading at Haitong International Securities. Abe’s meeting with Trump seemed to have been positive and investors are beginning to think Trump has become more aware of the complexities of being president, but market participants are still waiting to see results.
“Show me the money,” Sullivan said.