Asian Stocks Rise On Easing Tariff Worries, Dollar Perks Up

Asian equities rose on Tuesday, following Wall Street's lead, as the possibility of tariffs being less severe than anticipated enhanced risk appetite, while the dollar remained close to three-week peaks following optimistic economic data that offered some reassurance. Investors are concentrating on the forthcoming reciprocal tariffs pledged by U.S. President Donald Trump and their effect on the global economy as concerns over a trade war seize markets.

Trump stated on Monday that automobile tariffs are imminent, although he suggested that not all the proposed levies would take effect on April 2, and certain countries might receive exemptions. That was sufficient for investors to boost U.S. stocks upward. The S&P 500 (.SPX) closed at its highest point in more than two weeks, while a surge in tech stocks pushed the Nasdaq (.IXIC) up by more than 2 per cent, per Reuters.

Stocks rally on easing tariffs.

Asian stock exchanges participated on Tuesday morning, as Japan's Nikkei (.N225) opened a new tab, and stocks in Taiwan (.TWII) opened a new tab and climbed more than 1 per cent. European futures indicated an upward trend during the early hours of Asian trading. "It appears we are gaining a clearer understanding of what these trade measures could entail, and at the very least, that is providing a bit more stability to the markets," stated Kyle Rodda, senior financial markets analyst at Capital.com. Chinese stocks were considerably calmer. Hong Kong's Hang Seng index (.HSI) decreased by 1 per cent, whereas the blue-chip CSI300 index (.CSI300) remained mostly stable.

Analysts stayed wary and doubtful about the rally enduring for an extended period. "The stance on trade might be easing, yet the risks associated with policy continue to be high," stated Gary Dugan, CEO of Global CIO Office. "The obstacles facing the market remain quite significant." Kristina Clifton, an economist with the Commonwealth Bank of Australia, noted that the markets have not adequately accounted for the negative news concerning the global economy from the forthcoming tariff decisions. "Negative developments for the U.S. and worldwide economies can ultimately bolster USD due to its appeal as a safe-haven."

The dollar reached a three-week peak against the yen at 150.95, following a 0.9 per cent increase in the prior session, while staying at its highest level since March 6 at $1.0781 per euro due to better-than-anticipated U.S. economic figures.

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Data revealed that S&P Global's preliminary U.S. Composite PMI Output Index, which monitors the manufacturing and services industries, rose to 53.5 this month, up from 51.6 in February. A figure over 50 signifies growth in the private sector.  The PMI indicates that the economy is picking up momentum after experiencing a slowdown in the middle of the first quarter. However, hard data such as retail sales and employment reports have suggested signs of weakness in the economy's foundation. Investors will now focus on the magnitude of the reciprocal tariffs set to be revealed next week and the specific countries the Trump administration will target.

Oil prices remained mostly stable during Tuesday's Asian hours after a 1 per cent increase in the prior session, as investors considered the effects of Trump's social media announcement regarding tariffs on nations purchasing oil and gas from Venezuela. Brent crude futures increased by 3 cents to reach $73.03. U.S. West Texas Intermediate crude increased by 1 cent to reach $69.12. Gold remained stable at $3,013.75 per ounce as concerns over U.S. tariffs eased, and a Federal Reserve official indicated a careful approach regarding interest rate reductions this year.