Asian shares, Aussie dollar climb on trade, earnings optimism

Shares in Asia rallied and the Australian dollar hit an eight-month high on Thursday as optimism over earnings and trade supported demand for higher yielding assets.

Tokyo’s broad Topix gauge of shares hit an all-time high, following new records on Wall Street overnight, after a trade pact between Japan and the US stoked speculation more deals would appear soon to head off sweeping tariffs. Nasdaq and S&P futures rose after results by Google parent Alphabet beat estimates to kick off the “Magnificent Seven” earnings season.

The US has also reached deals with the Philippines and Indonesia and an agreement with the European Union is also expected.

“Worst case concerns about tariffs in the US are probably dissipating to some degree at the moment, but nonetheless, tariffs are going up and that is a hurdle for consumers,” Brian Martin, ANZ’s head of G3 economics, said in a podcast.

The EU and US are closing in a trade deal that would impose 15% tariffs on European imports, while waiving duties on some items, according to officials from the European Commission. Meanwhile, Treasury Secretary Scott Bessent said US and Chinese officials will meet in Stockholm next week.

Second-quarter earnings season is underway in the US, with 23% of the companies in the S&P 500 having reported. Of those, 85% have beaten Wall Street expectations, according to LSEG data.

Results from Magnificent Seven members, whose results have powered indexes to previous peaks, are in the spotlight for guidance on spending and returns surrounding artificial intelligence (AI).

Alphabet strongly beat estimates and cited massive demand for its cloud computing services as it hiked its capital spending plans. But electric car maker Tesla posted its worst quarterly sales decline in more than a decade and profit that trailed analyst targets.

MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.3%. Japan’s Topix surged for a second day, rising 1.4% to surpass its previous all-time high reached last year.

The Australian dollar, a common proxy for risk sentiment, fetched USD 0.66, just off USD 0.6604 hit earlier, which was the highest since November 2024. The US dollar dropped 0.1% to 146.38.

US crude CLc1 climbed 0.4% to USD 65.5 a barrel. Spot gold was traded at USD 3,390.84 per ounce, up 0.1%.

In early trades, pan-region Euro Stoxx 50 futures shot up 1.3% at 5,435, while German DAX futures were up 1.3%.

US stock futures, the S&P 500, were up 0.13% and Nasdaq contracts climbed 0.4%.

(By Rocky Swift, Editing by Sam Holmes)