Asian stocks open higher as Tariff threat eases
Asian stocks advanced with US equity futures after President Donald Trump held off from imposing sweeping trade tariffs in his first day in office.
Shares climbed from the open in Australia, Japan and South Korea, with the MSCI Asia Pacific Index rising as much as 0.8%. US futures extended their rally from Monday when the cash market was closed. Asian currencies strengthened as Bloomberg’s gauge of the dollar dropped for a second day. Treasuries climbed.
After being sworn into office, Trump promised to sign a series of executive orders, including one that declares a national emergency at the U.S.-Mexico border. For now though, the executive action will not include new tariffs on the three biggest US trading partners. The president instead ordered his administration to address unfair trade practices globally, suggesting he will take a more deliberative approach to trade relations.
“The fact that we’re seeing signs of a more conciliatory relationship between the US and China, and the fact there could be a more tactful application of tariffs is great for the region,” said Kyle Rodda, a senior analyst at Capital.com in Melbourne. “Trump is pretty mercurial and it all could change in a Twitter post, but for now it’s filling investors with confidence that the worst of the trade war may not materialize.”
Monday’s whipsaw moves in equity futures and currencies were seen as providing a foretaste of the uncertainty and volatility to come. Shares in a number of sectors across Asia from electric cars to China-exposed
