SINGAPORE – Asia shares edged slightly higher on Tuesday, helped by gains in auto companies after US President Donald Trump suggested he might grant exemptions on auto-related levies already in place.
US Treasury bonds steadied having staged a recovery overnight following last week’s historic selloff, while the dollar continued to fall out of favour with investors.
Trump said on Monday he was considering a modification to the 25 percent tariffs imposed on foreign auto and auto parts imports from Mexico, Canada and other places. Those tariffs could raise the costs of a car by thousands of dollars, and Trump said car companies “need a little bit of time because they’re going to make ’em here.”
That followed Friday’s move to exempt smartphones, computers and some other electronics from Trump’s “reciprocal” US tariffs. But his administration later stepped up probes into imports of semiconductors after Trump said on Sunday he would be announcing their tariff rate over the next week.
“When we start to see some of these exemptions flow through for particular sectors, it helps markets think about tariffs as something that aren’t necessarily going to be all-encompassing, and that they might actually be reprieved,” said Illiana Jain, an economist at Westpac.
Investors took whatever good news they could get after last week’s heavy selling across markets and pushed shares slightly higher. MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was up 0.3 percent.
Japan’s Nikkei rose 1 percent, with shares of auto companies like Toyota and auto parts maker Denso among the top gainers on the index.
But gains were limited as uncertainty over Trump’s trade policies, and his constant back-and-forth on tariffs, continued to cast a cloud over markets and the global economic outlook.
US futures swung between losses and gains to last trade lower after an overnight gain on Wall Street.
Nasdaq futures and S&P 500 futures were each down close to 0.2 percent. In Europe, EUROSTOXX 50 futures fell 0.14percent, while FTSE futures were up 0.25 percent.
