Asian Stocks Rise as Tariff Schedule Lifts Mood
Asian stocks headed higher on Friday as markets reacted positively to the delay of a possible U.S. reciprocal tariff, raising the prospect of negotiations.
Shares in Australia and Japan and equity futures for Hong Kong all rose, suggesting stock gauges across the region may rise for a third day. A gauge of U.S.-traded Chinese companies rose more than 1% in New York trading. A gauge of global stocks closed at a record high.
The S&P 500 rose 1% while the Nasdaq 100 gained 1.4% as big tech outperformed. Tesla Inc. and Nvidia Corp. each rose more than 3%, while Meta Platforms Inc. fell for a 19th straight day. U.S. President Donald Trump has ordered his administration to consider imposing reciprocal tariffs on a range of trading partners, citing Japan and South Korea as countries he believes are taking advantage of the U.S. But investors appeared to express little relief at the timeline for the process, which involves proposing levies on a country-by-country basis. Howard Lutnick, Trump’s nominee to lead the Commerce Department, told reporters the work could take until April to complete.
“President Trump is trying to level the global playing field by imposing reciprocal tariffs on countries that maintain levies on the U.S.,” Jose Torres at Interactive Brokers said earlier this week. “But investors are starting to realize that a lot of the talk is going nowhere with the rhetoric increasingly looking like a negotiating tactic.”
Treasury bonds were little changed in early Asian trading after rallying in the previous session. Australian and New Zealand yields fell Friday morning. Gauges of the dollar’s strength were little changed after falling on Wednesday, while the yen regained some of its resistance against the greenback from the previous day. Trump also said he would discuss India’s purchases of U.S. oil and gas with visiting Indian Prime Minister Narendra Modi. The meeting was overshadowed by the announcement of reciprocal tariffs hours before Modi arrived at the White House.
In Asia, U.S.-based private equity firm KKR & Co. is considering investing in Nissan Motor Co. after the struggling Japanese automaker’s talks to merge with rival Honda Motor Co. collapsed. Data due in the region on Friday include unemployment in South Korea, gross domestic product for Malaysia and wholesale prices for India. Meanwhile, oil settled little changed on Thursday, recovering from its lowest level since December, as an unclear timeline around Trump’s tariff plans offset potential risks of easing Russian supplies.
Wall Street traders shrugged off hot inflation data amid signs that the Federal Reserve’s favorite price gauge will be softer than expected. The producer price index rose more than expected in January. However, some of its components that feed into the Fed’s preferred inflation measure — the personal consumption expenditures price index — were more favorable last month, with declines in most health care items and airfares. The next PCE is due on Feb. 28.
“While the PPI was much higher than expected, with revisions higher, the real data that feeds into the PCE is weaker,” said Andrew Brenner at NatAlliance Securities. “And the PCE is what Jerome Powell and the Fed are looking at. So in reality, the numbers are better.”
Elsewhere in commodities, gold rose for a second day Thursday to reach a record high hit earlier in the week. The precious metal has been moving higher this year, fueled by safe-haven demand, setting back-to-back records with the potential to line up a test of $3,000 an ounce.
Source: Bloomberg
