BY ANKUR BANERJEE
SINGAPORE- Asian stocks rose on Thursday as investors held out hope that trade tensions could ease after US President Donald Trump exempted automakers from tariffs for a month, while the euro stood tall ahead of the European Central Bank policy meeting.
Japanese government bonds fell sharply in Asian hours after German long-dated bonds were swept up in their biggest sell-off in years as the parties in talks to form Germany’s new government agreed to try to loosen fiscal rules.
Japan’s 10-year government bond yield hit a near 16-year high as sentiment remained fragile.
Much of the focus in markets remains on an escalating global trade war after 25 percent tariffs on imports from Mexico and Canada were imposed on Tuesday along with fresh duties on Chinese goods, sparking fears about economic growth.
But on Wednesday, the White House said Trump will exempt automakers from his 25 percent tariffs on Canada and Mexico for one month as long as they comply with existing free trade rules.
That led US stocks sharply higher, shoring up Asian markets in early trade. MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.86 percent, while Tokyo’s Nikkei gained 0.8 percent.
“Obtaining any kind of reliable signal from the headlines is almost impossible,” said Chris Weston, head of research at Pepperstone.
“One must truly feel for those businesses that need to plan ahead – with tariff policy changing almost daily, the ability to have any sort of confidence to make strategic decisions is currently almost impossible – this will have implications.”
China and Hong Kong shares rose on Thursday, a day after Beijing set an ambitious economic growth target and vowed more support for domestic consumption and the tech industry as a trade war with the United States ratchets up.
