On September 4–5, 2025, Asian stock markets rose as a Wall Street rally extended into the region, supported by signals of a cooling U.S. labor market that boosted expectations the Federal Reserve may cut interest rates this month.
Key Takeaways
- Asian shares climbed about 0.7% on the session.
- Mainland China indexes rebounded after a slump on Thursday.
- S&P 500 futures rose roughly 0.2% after the index closed at a record high.
- Japanese stocks advanced after President Donald Trump signed an executive order implementing the U.S.-Japan trade agreement.
- Markets are pricing a higher probability of a Fed rate reduction ahead of Friday’s U.S. jobs report.
- European futures pointed to a stronger open following U.S. gains.
- Short-term moves reflect risk appetite tied to macro data and policy expectations rather than company-specific news.
Verified Facts
Asian equity benchmarks moved higher on Sept. 4–5, 2025, with a reported gain around 0.7% for regional shares. That advance followed a rally on Wall Street where the S&P 500 closed at a record high; S&P futures were trading about 0.2% higher in overnight contracts.
Indexes on mainland China recovered from losses experienced the previous day. The rebound was broad-based across sectors, though volume and leadership varied by market and country.
Japanese equities benefited from a policy development: President Donald Trump signed an executive order to implement a recently negotiated trade agreement with Japan, a step markets interpreted as supportive for Japanese exporters and investor sentiment.
Traders cited additional signs of a cooling U.S. labor market as a key driver of sentiment. Those readings have increased the odds priced into futures that the Federal Reserve will reduce interest rates later this month, a shift that tends to support risk assets globally.
Context & Impact
Expectations for a Fed cut are central to current market direction. If the labor market data due Friday confirms softer hiring or wage growth, the probability of a September cut would rise further, likely extending the rally in risk assets and pressuring the dollar.
For Asia, a sustained rally could ease funding pressures in regional fixed-income markets and lift confidence among exporters, though gains may be uneven — China’s recovery remains fragile and highly sensitive to domestic policy signals.
Japan’s market reaction also highlights how trade-policy moves can influence equity flows, particularly in export-heavy sectors. Near-term gains in Tokyo may be tempered if macro data or geopolitical news alters the policy outlook.
Official Statements
President Trump signed an executive order to implement the U.S.-Japan trade accord, a move reported to bolster investor sentiment in Japan.
Bloomberg
Unconfirmed
- Precise causality between the trade-order announcement and every sector move in Japan has not been independently verified.
- The timing and size of any Federal Reserve rate cut remain subject to incoming data and are not guaranteed.
Bottom Line
Global risk appetite strengthened into the U.S. jobs release, with Asian markets participating in a broader rally driven by weaker labor-market signals and policy developments. Traders will focus on Friday’s employment data for confirmation; its outcome should shape market direction and Fed expectations into the rest of September.