Asian markets continued to soar and roar on Tuesday as investors remained optimistic about the global economy’s outlook.

Tokyo’s Nikkei 225 index rose 1.7 percent as the city’s inflation rate hit its highest level in 42 years. Other markets in the Asia-Pacific region also saw gains, with South Korea’s Kospi index and Hong Kong’s Hang Seng both up more than 1 percent.

On Wall Street, the Dow Jones Industrial Average and S&P 500 both rose more than 1 percent on Monday, driven by strong corporate earnings and optimism that the US will be able to avoid a recession.

The gains in Asia followed a rally in US stocks, which were buoyed by news that the US and China are close to signing a Phase 1 trade deal.

The news helped to lift sentiment in Asian markets, with investors betting that the deal will help to reduce tensions between the two countries and support global growth.

“Asian markets are taking cues from Wall Street and are looking to extend their gains,” said Jeffrey Halley, senior market analyst at OANDA.

Overall, the strong performance in Asia-Pacific markets points to investor optimism about the global economy, despite lingering concerns about the US-China trade war.