Asian markets cooled off Tuesday after the previous day’s surge as traders digested Donald Trump’s visit to Asian ally Japan, ahead of his high-stakes talks with Chinese President Xi Jinping later this week.

The US president is due to meet Xi Thursday in South Korea, and rosy comments by Trump have fuelled optimism that the world’s two largest economies can strike a deal to ease their trade war.

Those hopes spurred stocks to record highs Monday on Wall Street, where investors are also preparing for earnings reports from tech giants including Microsoft and Meta this week.

In Tokyo on Tuesday, Trump met new Japanese Prime Minister Sanae Takaichi, declaring that the United States was “an ally at the strongest level”.

The White House announced that the countries had signed an agreement on

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