Asian markets opened today’s session with moderate gains, driven by expectations that the U.S. administration will introduce additional tariff exemptions. This eased some of the pressure stemming from the escalating trade conflict with China. Despite improved risk appetite, gains remained limited due to uncertainty surrounding U.S. policy direction—especially after President Trump stated that the exemptions would be “temporary.”
In contrast, Chinese indices failed to keep up with the upward trend in the rest of Asia, with the Shanghai and CSI 300 indices showing choppy performance. This volatility was fueled by the ongoing trade war and Beijing’s retaliatory tariffs of 125% on American goods. Attention is now turning to China’s Q1 GDP data, which will reveal whether the economic stimulus measures introduced by Chinese authorities in late 2024 have started to bear fruit.
Tokyo and Seoul stock exchanges recorded strong performances, supported by improved investor sentiment in the technology and automotive sectors. The Nikkei index rose significantly after the White House hinted at the possibility of exempting car imports from tariffs. This positively impacted shares of companies like Toyota, Honda, and Hyundai, which jumped by nearly 5%. Technology firms also benefited from similar exemptions on certain electronic devices, boosting demand for tech-related stocks.
In Sydney, the ASX 200 index posted modest gains following the release of the Reserve Bank of Australia’s meeting minutes, which indicated that rate cuts were not strongly considered during the last meeting. This stance helped strengthen the Australian dollar, which emerged as one of the best-performing currencies today, rising 1.4% against the U.S. dollar. The central bank noted that escalating trade tensions could lead to sharp fluctuations in inflation and growth, prompting a cautious approach until the global economic outlook becomes clearer in the coming months.
Meanwhile, the U.S. dollar index recorded a slight decline of 0.1%, continuing its slide near a three-year low. This decline came amid relatively flexible U.S. trade positions, with potential exemptions for auto imports from countries like Mexico and Canada, as well as some tech devices from China. These developments supported the performance of commodity-linked and emerging market currencies during the Asian session.
