Asia-Pacific stocks rose sharply Tuesday as opposition in Washington to planned U.S. tariffs on steel and aluminum grew.
A lack of detail about the plans and pushback from some senior Republicans soothed investor nerves over the possibility of an escalation of trade protectionism.
“Investors shrugged off trade war fears as a ‘political show’,”said analysts at OCBC Bank , commenting on moves in Asia that followed solid gains overnight in global markets.
The Nikkei Stock Average NIK, +1.79% led regional gains, rising as much as 2.4% before giving up some of the gains as Bank of Japan Gov. Haruhiko Kuroda again touched on an eventual exit from the bank’s ultra-easy monetary policy. The Nikkei was up 1.8%, after hitting its lowest closing level since October a day earlier.
The index was supported by softness in the yen. The U.S. dollar USDJPY, +0.15% was around ¥106.25, up from ¥105.56 when Tokyo stocks stopped trading Monday.
South Korea’s Kospi SEU, +1.53% was up 1.4%, while stocks in Australia XJO, +1.14% Singapore XJO, +1.14% and Taiwan Y9999, +1.33% rose around 1.2%.
Hong Kong stocks rebounded, with the Hang Seng Index HSI, +2.09% up 1.4% after Monday’s 2.3% slide, led by index heavyweight Tencent’s 0700, +3.20% 2.9% jump, and gains in banks, which skidded the day before. China’s mobile operators also outperformed, following falls the previous day on Beijing’s fee reduction plan. Unicom 0762, +1.82% was up 2.4%.
China shares SHCOMP, +1.00% swung from mild early losses to mild gains, on the second day of the National People’s Congress.
Investors in China are expected to stay cautious as they monitor comments from the congress, said Castor Pang, head of research at Core Pacific-Yamaichi International.
The gains in Asia followed a rally in global equity markets overnight as the status of the planned U.S. tariffs on steel and aluminum became less clear. House Speaker Paul Ryan pushed back against the plan while other top Republicans expressed concerns in a letter. President Donald Trump also suggested that the tariffs were negotiable in comments directed at Canada and Mexico.
Oil futures held steady, maintaining the momentum seen during U.S. trading as risk appetite returned. April WTI CLJ8, +0.51% was up 6 cents at $62.66 a barrel and May Brent LCOK8, +2.21% was 2 cents higher at $65.56.