Asian stock markets rose on Wednesday, buoyed by gains in technology stocks and fluctuations in the U.S. dollar, as the impact of U.S. tariff increases on steel and aluminum took effect, marking the latest chapter in an ongoing trade war that has weighed on markets throughout the year.
Investor attention remains focused on trade negotiations, with limited progress to report. Wednesday marked the final deadline for U.S. trading partners to submit proposals that may help them avoid high tariffs, set to be imposed five weeks from now by President Donald Trump under the “Liberation Day” tariffs.
Trade Uncertainty and Tariff Concerns Continue
The European Central Bank (ECB) began its two-day policy meeting, with expectations of an interest rate cut, leading European stock index futures to open higher.
In Asia, South Korean stocks surged following the election of liberal candidate Lee Jae-myung, who is expected to implement rapid economic stimulus, market reforms, and alleviate policy uncertainty. The South Korean won also strengthened as a result. The benchmark KOSPI index rose over 2%, hitting its highest level since August 2024, which helped the MSCI Asia Pacific index excluding Japan climb nearly 1%.
Meanwhile, Japan’s Nikkei 225 index gained 0.8%, and Taiwan’s stock market saw a boost from a 2% rise in shares of AI giant Nvidia, which helped lift U.S. stocks on Tuesday.
Mixed Economic Data and Ongoing Trade Tensions
U.S. data showed that job vacancies increased in April, but so did layoffs, signaling that the labor market is beginning to slow due to the economic uncertainty stemming from tariffs.
As tensions between the world’s two largest economies continue to rise, investors are closely watching for any developments in a potential phone call between U.S. President Donald Trump and Chinese President Xi Jinping, expected later this week. Trump accused China on Friday of violating a Geneva agreement aimed at removing tariffs and trade restrictions. Beijing responded by reaffirming its stance on protecting its interests, calling the accusation baseless.
Stock Market Moves Across Asia
Chinese stocks rose on Wednesday, with the blue-chip CSI 300 index climbing 0.58% and the Hong Kong Hang Seng index gaining 0.56%. Charu Chanana, Chief Investment Strategist at Saxo Bank in Singapore, noted, “Markets may not be overly sensitive to trade news, but Trump and Xi’s conversation remains a focal point. While a major agreement is unlikely, any escalation could still trigger risk-off sentiment.”
Trump also signed an executive order on Wednesday to implement the surprise steel and aluminum tariff hike he announced last week. The tariffs on imports, which have been in effect since March, are now being increased from 25% to 50%.
Dollar Weakness and Economic Outlook
Macquarie’s global forex and rates strategist Thierry Wiseman commented, “We see steel and aluminum tariffs as indicative of other strategic tariffs that could be implemented and potentially sustained. As such, the upward momentum for the U.S. dollar remains limited.”
The unpredictability of Trump’s tariff measures has driven investors to move away from U.S. assets this year, seeking safe-haven alternatives such as gold and other currencies. Trade uncertainty has also raised concerns about its impact on global economic growth.
The Organization for Economic Co-operation and Development (OECD has lowered its global growth forecast for 2025 and 2026, from 3.3% last year to 2.9%, primarily due to the effects of the U.S. trade war.
Dollar and Commodity Market Movements
On Wednesday, the dollar gained 0.18% against the Japanese yen, reaching 144.225. The euro held steady against the dollar at 1.1368.
The U.S. Dollar Index, which measures the dollar against six major currencies, stood at 99.31, not far from its six-week low of 98.58 reached on Monday. The index has fallen 8.5% so far this year.
In the commodities market, oil prices fell as OPEC+ increased output, easing the supply-demand balance, and concerns over tariffs continued to weigh on the global economic outlook. Brent crude futures dropped 0.38% to $65.38 per barrel, while U.S. West Texas Intermediate (WTI) crude futures declined 0.41% to $63.15 per barrel.
Gold prices held steady at $3,351.5 per ounce, supported by safe-haven inflows. Year-to-date, gold prices have risen an impressive 28%.
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