Asian Stock Markets Rise After Big Free Trade Agreement – E24

There is a broad surge in stock markets in Asia early Monday morning after the world’s largest free trade agreement was signed on Sunday.

Fifteen countries in Southeast Asia and the Pacific region, including China, Australia and Japan, signed the RCEP agreement. Negotiations to reach the agreement have been going on for years.

The huge free trade agreement applies to 2.2 billion people and 29 percent of the world’s economic activity.

The deal will mean reduced tariffs, the introduction of common trade rules and a new supply chain. It covers everything from commerce, services, investment, e-commerce, telecommunications, and copyright.

This is the morning in the largest indices in Asia at 05.30:

• The Nikkei 225 in Tokyo is up 1.84 percent
• Hang Seng in Hong Kong is up 0.41 percent
• Kospi in Seoul up 1.88 percent
• The FTSE Straits Times in Singapore rises 1.28 percent
• Shanghai Composite rises 0.97 percent
• The ASX 200 in Sydney is up 1.28 percent

In Tokyo, the strong performance of the Japanese economy is also contributing to the rebound. The country’s economic growth was 21 percent in the third quarter, compared to the same period last year.

The positive numbers come after three-quarters of the decline in the world’s third-largest economy. Therefore, the country is already out of recession.

The effects of the corona pandemic and a tax hike pushed the country into recession earlier in the year. Adjusted figures show an 8.2 percent decline in Japan’s gross domestic product (GDP) in the second quarter.

But the country’s economy has recovered dramatically as business activity has increased. It is after private consumption and exports in particular that it contributes to a GDP growth of 5 percent from the second to the third quarter.