Nikkei 225 Slides on Trade Woes as CSI 300 Gains on Beijing Stimulus Buzz

US Futures Fall as Japan Deal Falters; Gold Hits Record High

US futures stumbled out of the gate Monday, April 21, as hopes for a swift US-Japan trade deal unraveled, sending shockwaves through global markets and lifting gold to record highs. Dow Futures dropped 279 points in early trading, while the S&P 500 and the Nasdaq 100 Index fell 34 and 97 points, respectively. Meanwhile, demand for safe-haven assets sent gold prices to a record high of $3,385.

The Kobeissi Letter commented on market sentiment, stating:

“Futures are extending losses to a new low of the day. This is what happens when the entire market rallies on hopes of a ‘Japan deal.’”

PBoC Holds Rates Steady Amid Tariff Uncertainty

The People’s Bank of China (PBoC) left its 1-year and 5-year Loan Prime Rates unchanged at 3.1% and 3.6%, respectively, on April 21, in line with expectations.

Meanwhile, economic data from China delivered more good news, suggesting Beijing’s stimulus measures continued bolstering demand. The CN Wire reported:

“China’s NBS: China January-March wholesale and retail industry added value reached 3.3 trillion Yuan, up 5.8% Y/Y.”

Expectations of further stimulus measures from Beijing supported demand for Mainland China-listed stocks on April 21. Updates from China’s latest cabinet meeting highlighted key focal points, including stabilizing the stock market, employment, and foreign trade. Lawmakers also aim to support healthy development of the property market while enabling foreign companies to reinvest into China.

Mainland Equities Rise on Stimulus Hopes

In Asia, Mainland China’s equity markets kicked off the week with early gains. Upbeat economic data and hopes for fresh stimulus measures countered market concerns about the US-China trade war.

The CSI 300 gained 0.28% on Monday morning, while the Shanghai Composite Index rose 0.51%. Hong Kong markets remained closed for the Easter Monday holiday.

Brian Tycango, editor and analyst at Stansberry Research, remarked on China’s economic momentum, stating:

“China 1Q25 GDP +5.4%. Fixed asset investment +4.2%. Retail sales +4.6% in 1Q; March retail sales +5.9%, March mfg PMI 50.5 (12m high). March svcs PMI 50.8. China is collapsing upwards.”

Economists had previously expected US tariffs to immediately impact the Chinese economy.

Nikkei 225 Drops on Trade Uncertainty

Japan’s Nikkei 225 fell 0.98% on Monday morning amid fading hopes of a US-Japan trade deal, weighing on risk assets. Demand for safe-haven assets, including the Yen, left the USD/JPY pair down 0.94% to 140.771 in early trading. A stronger Yen could affect demand for Japanese goods and corporate earnings.

Notable movers included Nissan Motor Corp. (7201), which dropped 2.02%, while Sony Corp. (6758) fell 2.08%.

Outlook: Tariffs, Stimulus, and Central Bank Watch

With trade tensions flaring and stimulus hopes rising, markets remain on edge as investors await clarity from central banks and policymakers. Looking ahead, several factors may shape market sentiment::

• US-China trade updates—escalations could dent risk appetite, while progress may lift Chinese equities.
• Beijing’s policy measures aimed at boosting domestic demand.
• Central bank commentary on trade impacts and interest rate trajectories in the US and Asia.

Given ongoing volatility, investors should explore strategies aligned with geopolitical risk. For deeper guidance, consult our latest market insights.