Most Asian stocks advanced on Tuesday, tracking gains on Wall Street after U.S. President Donald Trump temporarily relaxed certain tariffs, especially on electronics, while signs of easing pressure in the U.S. bond market also supported sentiment.
Japan’s Nikkei 225 jumped 0.9% to 34,336.74.
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Automakers led the gains, with Toyota Motor Corp. climbing 4.9% and Honda Motor Co. up 4.8%. Sony Corp. rose 3.1%, Nintendo edged 0.3% higher, and semiconductor producers Tokyo Electron and Renesas added 1.1% and 1.4%, respectively.
In Australia, the S&P/ASX 200 advanced 0.5% to 7,787.40, while South Korea’s Kospi gained 0.8% to 2,475.25.
Chinese markets showed mixed performance. Hong Kong’s Hang Seng dipped before inching up by less than 0.1% to 21,423.44. Meanwhile, the Shanghai Composite slipped 0.1% to 3,260.55.
“This is becoming the norm: one step forward, two steps back, followed by sudden shifts to carrot-and-stick tactics. That seems to be this administration’s approach — issue a strong policy, then dilute it with selective exemptions or temporary delays. It’s a kind of market management resembling whack-a-mole,” said Stephen Innes, managing partner at SPI Asset Management.
On Monday, Wall Street rebounded. The S&P 500 rose 0.8% to 5,405.97, although trading remained volatile. The Dow Jones Industrial Average climbed 0.8% to 40,524.79, and the Nasdaq composite added 0.6% to 16,831.48.
Technology stocks like Apple helped buoy markets after Trump announced exemptions for smartphones, computers, and other electronics from certain steep tariffs that could have significantly increased prices for American consumers. These exemptions mean U.S. importers can avoid raising prices or absorbing higher costs themselves.
Apple gained 2.2%, and Dell Technologies advanced 4%.
Carmakers also benefited after Trump hinted at potential pauses on automotive tariffs. General Motors rose 3.5%, while Ford Motor rallied 4.1%.
Still, the relief could be short-lived. Trump's tariff measures have been marked by abrupt changes, and his administration has stressed that the electronics exemptions are only temporary.
This ongoing uncertainty complicates long-term planning for companies and consumers alike, as policy direction shifts frequently. Financial markets have experienced dramatic swings as investors attempt to react to the shifting landscape.
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A more promising development for investors was the stabilisation of the bond market, which had been volatile the previous week.
Typically, Treasury yields fall when investor anxiety is high, since U.S. government bonds are seen as safe havens. But last week saw an unusual spike in yields, coupled with a decline in the U.S. dollar’s value against other major currencies — hinting that global investors might be reconsidering the U.S. as their preferred refuge during turbulent times.
Last week, Trump announced a 90-day pause on many of the tariffs, citing concerns from bond market participants who were “getting a little queasy.”
By early Tuesday, the yield on the 10-year Treasury note had eased to 4.35%, down from 4.48% on Friday and 4.01% a week earlier.
Yields fell following positive data regarding inflation expectations from U.S. households. While consumers projected slightly higher inflation over the next year, expectations for inflation over the next three to five years either held steady or declined, according to a survey from the Federal Reserve Bank of New York.
This is potentially favourable for the Federal Reserve, which is wary of rising long-term inflation expectations, as they can trigger behavioural shifts that further fuel inflation.
In other early Tuesday trading, benchmark U.S. crude increased by 17 cents to $61.70 a barrel, while Brent crude, the global standard, rose 16 cents to $65.04 a barrel.
The U.S. dollar strengthened to 143.14 Japanese yen from 143.04 yen. The euro edged down slightly to $1.1346 from $1.1351.