Asian stocks rise amid trade optimism, US policy uncertainty remains

Asian stock markets saw a positive shift on Wednesday, driven by optimism that the impact of Donald Trump’s upcoming tariff measures may be less severe than initially feared.

However, uncertainty surrounding the president’s policies and the broader US economic outlook tempered overall market sentiment.

With the White House’s “Liberation Day” on April 2 approaching, there has been growing concern over the potential for sweeping import tariffs, sparking fears of a global trade slowdown, recession, and rising inflation. But recent indications from Trump and Washington suggest the tariffs could be more selectively applied, offering a glimmer of hope that the worst-case scenario may be avoided.

In an interview with Newsmax, Trump remarked, “I don’t want to have too many exceptions,” but noted that he might be “more lenient than reciprocal,” signaling that the tariffs could target specific countries rather than being blanket measures.

This tempered approach contributed to Wall Street’s recovery, where two consecutive days of gains helped reverse some of the heavy losses caused by fears of US trade policies harming corporate earnings. Following this trend, Asian markets also saw gains, with Hong Kong rebounding after a sharp drop in the previous session, while Tokyo, Sydney, Shanghai, Seoul, Singapore, and Wellington all posted positive returns.

In particular, Jakarta surged nearly 3% after a steep sell-off earlier this year, though the Indonesian rupiah remained near its lowest levels since the Asian financial crisis of the late 1990s. Conversely, Taipei and Manila saw slight declines.

Despite some optimism regarding the tariff situation, concerns about the US economy continue to cast a shadow. The Conference Board’s consumer confidence index dropped to its lowest point since 2021, as inflation fears grow. A separate gauge of future expectations also hit a 12-year low, raising doubts about the economic outlook.

As the Federal Reserve reviews its monetary policy in response to Trump’s tariff plans, analysts warn that interest rate cuts may be delayed further this year. Saxo’s chief investment strategist, Charu Chanana, reflected on the turbulent first quarter, noting that markets quickly shifted focus from rate cuts to issues like economic resilience and trade policy disruption.

Meanwhile, geopolitical news, including an agreement between Russia and Ukraine to halt military strikes in the Black Sea and energy sites, had little immediate impact on markets. The deal, brokered by Washington, is contingent upon the lifting of restrictions on Russia’s agriculture sector.

Key Figures (around 0230 GMT):

Tokyo – Nikkei 225: Up 0.3% at 37,890.15
Hong Kong – Hang Seng Index: Up 0.2% at 23,391.53
Shanghai – Composite: Up 0.1% at 3,371.91
Euro/Dollar: Up at $1.0794 from $1.0791 on Tuesday
Pound/Dollar: Up at $1.2944 from $1.2943
Dollar/Yen: Up at 150.14 yen from 149.90 yen
Euro/Pound: Up at 83.40 pence from 83.37 pence
WTI Crude: Up 0.4% at $69.25 per barrel
Brent Crude: Up 0.3% at $73.24 per barrel
New York – Dow: Flat at 42,587.50 (close)
London – FTSE 100: Up 0.3% at 8,663.80 (close)