Asian shares: Asian shares rise as Japan rallies, dollar gains

The Nikkei-225 Index jumped 1.3% as trading kicked off in a new week, bouncing back after the Bank of Japan’s comments on ETF sales spooked the markets Friday. Shares in Australia and South Korea also rose at the open. US equity-index futures were flat, paring some of their earlier losses as traders weighed the impact on the tech industry from the sharp increase in H-1B skilled worker visa application fees.

A gauge of the dollar edged up 0.1%. Oil rose 0.3% after notching a modest drop last week.

A large overhang that had threatened the Japanese equity market was eased after the central bank unveiled a century-long plan to offload its massive exchange-traded fund holdings. Sentiment also improved after US President Donald Trump touted progress on China-related issues and said he would meet Chinese leader Xi Jinping following a highly anticipated call between the two leaders.

Wall Street closed out the highly anticipated Federal Reserve week with stocks notching fresh all-time highs as prospects for more rate cuts bolstered the outlook for corporate earnings.

“Discussion of ‘bubbles’ has officially entered the market dialogue – if the S&P 500 is in one, how far to go – and intensified with September’s rally bucking seasonal volatility,” said Julian Emanuel, strategist at Evercore ISI, in a note Sunday. “But a bubble has a long way to go.”Evercore sees 25% odds of a bubble scenario — SPX 9,000 by year-end 2026 — versus 7,750 base case.Trump on Friday also called for a sweeping overhaul of the H-1B visa program, including a $100,000 application fee. The move rattled companies that have long depended on the program to recruit global talent, particularly in California’s tech-heavy economy, where employers rely on skilled computer programmers, data analysts and engineers.

The move may inject fresh uncertainty into global markets. Pressure may be most acute in India and its $280 billion IT sector that’s already grappling with sluggish growth and tensions between Prime Minister Narendra Modi and Trump.

It’s “hard to escape the idea it’s not aimed at Modi and India,” said Tony Sycamore, an analyst at IG in Sydney.

Elsewhere, China’s one-year and five-year loan prime rates, which are expected to remain steady for a fourth month, will also be in focus on Monday. Commercial banks are waiting for guidance from the People’s Bank of China, which may be reluctant to ease policy to support a sluggish economy to avoid stoking a hot stock market, according to David Qu, an analyst at Bloomberg Intelligence.

Traders this week will parse a swath of data including activity readings in Europe and the Federal Reserve’s preferred measure of inflation. Fed Chair Jerome Powell is also due to speak on the outlook for the economy on Tuesday, after he pushed back against expectations of rapid rate cuts after the central bank eased policy last week.

In commodities, oil edged higher after Trump renewed his call for European countries to stop buying oil from Russia to halt the war in Ukraine. Gold was also up slightly.

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