Nikkei surges to fresh record on pro-stimulus LDP win, U.S. futures rebound as Trump softens China stance, German wholesale prices tick up
- Global equities are showing a renewed ‘risk-on’ tone, driven by a surge in Japan and a temporary easing of US–China trade tensions. The Nikkei index is set to reach a new high when cash trading resumes, following Sanae Takaichi’s pro-stimulus victory in the LDP leadership race. Markets are anticipating a revival of ‘Abenomics-style’ policies, which have caused the yen to slide to around ¥150.6 per USD — providing an ongoing tailwind for Japan’s exporters. However, Finance Minister Kato has warned about excessive FX volatility, which could signal potential intervention.
- In the US, futures are rebounding as President Donald Trump has suddenly softened his rhetoric towards China, easing fears of a massive new tariff escalation. This improved sentiment is positive for mega-cap tech stocks, even though the ongoing government shutdown (now in its 13th) day) is delaying the release of key economic data (like CPI, now scheduled for 24 October) and the U.S. bond market is closed for the holiday, which is leading to distorted liquidity. The Q3 earnings season is also beginning, with major US banks reporting this week.
- In Europe, the DAX is opening higher, supported by the improved tone in U.S.–China trade relations. New data shows that Germany’s wholesale prices rose by 1.2% year-on-year in September, primarily due to higher prices for food, beverages and non-ferrous metals. This indicates a modest re-emergence of pipeline inflation. This supportive news, along with an upgrade from Deutsche Bank for European stocks, is improving the regional risk appetite, although ongoing political turmoil in France remains a concern.

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