By Dow Jones Newswires Staff
Asian stock markets powered higher on Thursday, tracking an overnight rally on Wall Street following President Trump's decision to pause steep tariffs on a swath of countries that had been put into effect just hours before.
Trump on Wednesday said that he would place a 90-day pause on so-called reciprocal rates announced a week earlier on nations the administration views as "bad actors" on trade--with the exception of China, which now faces an even higher 125% tariff.
The pause "pulls stocks and the market from the edge of the cliff," Wedbush analysts said in a note. "This was the news we and everyone on the Street was waiting for."
"Now we would expect massive negotiations across the board over the coming months, including China being front and center as the biggest wild card," Wedbush added.
Trump's about-face sent the Dow Jones Industrial Average 7.9% higher on Wednesday, its best day since 2020, while the tech-heavy Nasdaq surged 12% in its best day in 24 years.
That spilled over into the Asia session, where Japan's Nikkei Stock Average jumped 9.1%, marking its biggest one-day percentage gain since August 2024. Australia's S&P/ASX 200 closed 4.5% higher.
In South Korea, the Kospi rose 6.6%, posting its sharpest daily gain since March 2020, coming after the stock-market regulator briefly halted trading on the main exchange early in the morning following a relief rally.
Taiwan's Taiex led regional gains, rising 9.25% to lock in its largest daily percentage gain since 1991 as chip and electronics stocks rallied. TSMC added 9.9% and Foxconn Technology jumped 9.8%.
Hong Kong's Hang Seng Index was up 2.9% in afternoon trade, while China's Shanghai Composite Index advanced 1.1%, rising despite the escalation of tit-for-tat tariffs between the U.S. and China.
Anticipating that higher U.S. tariffs will likely weigh significantly on the Chinese economy and labor market, Goldman Sachs economists lowered 2025 and 2026 growth forecasts for China.
The tariff reprieve sent stocks in Southeast Asia higher, buoying trade deal hopes. U.S.-Vietnam talks are getting underway, and officials in Malaysia and Indonesia have signaled willingness to hold discussions.
Malaysia's benchmark Kuala Lumpur Composite Index jumped 4.6%, while Indonesia's Jakarta Composite Index added 5.2%. In Vietnam, the benchmark VN index rose 6.7%--notching its best intraday gain since June 2011--and the Philippine Stock Exchange Index was 1.1% higher.
Prices of short-term government bonds in Japan, Australia and New Zealand fell, dragged by the risk-on sentiment sparked by Trump's tariff pause. The yield on two-year Japanese government bonds rose 6.5 basis points to 0.670%, the yield on two-year Australian government bonds jumped 10 basis points to 3.3290%, and the yield on two-year New Zealand sovereign debt was 8 basis points higher at 3.3070%.
Asian currencies were mixed against the dollar in the afternoon as traders digested Trump's tariff announcements. The dollar fell 0.8% to 146.63 yen, but rose 0.9% to 1,459.30 against the Korean won, according to FactSet. The Australian dollar advanced 0.8% to 0.6201 versus the greenback.
"Trump's objectives suggest the global trade war can persist," Commonwealth Bank of Australia's Carol Kong said. "Tariff rates could yet go higher," the economist and currency strategist added.
Write to Ronnie Harui at ronnie.harui@wsj.com
(END) Dow Jones Newswires
April 10, 2025 03:04 ET (07:04 GMT)
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