Driven by signs of easing trade tensions between the U.S. and China, emerging market stocks have surged to their highest levels in over four years. On Monday, an emerging market stock index rose by 1.5%, reaching its strongest point since June 2021. Notable gainers included stocks such as TSM.US, 00700, and 09988. Additionally, an emerging market currency index also increased by 0.2%. Market sentiment improved following comments from U.S. President Trump during an interview on Sunday, wherein he stated that the tariffs imposed on Chinese goods were "unsustainable," though they would "remain in place for now." He also mentioned maintaining a good relationship with Chinese leaders and anticipated a meeting between both parties in South Korea. The Asia-Pacific Economic Cooperation (APEC) meeting is scheduled to take place in South Korea later this month. Trump highlighted that rare earths, fentanyl, and soybeans are core issues in U.S.-China negotiations. Chris Weston, Head of Research at Pepperstone Group, noted in a report, "While the future development of trade relations remains uncertain, current market pricing seems to suggest a positive outcome, or at least that things won’t get worse." Weston added that the prevailing market expectation seems to be that China will relax restrictions on rare earth exports, potentially extending the current tariff truce. "However, some might question whether the market is underestimating the risk of China not making concessions." Most Asian emerging market currencies appreciated against the dollar, with the South Korean won and the Indian rupee leading the gains. Analysts from Barclays, including Lefteris Farmakis, stated in a report, "Given the strategic importance of the current contentious issues, we have ample reason to believe that the U.S.-China dispute will remain manageable at this stage."