BY ANKUR BANERJEE AND ROCKY SWIFT
TOKYO — Asian stocks joined the global rally and the US dollar held on to most of its gains on Tuesday as investors heaved a sigh of relief after a temporary halt in the trade war between the US and China eased worries of a global recession.
Japan’s Nikkei soared 2 percent, touching its highest level since February 25, and tech-heavy Taiwan also rose 2 percent, while Chinese stocks inched higher in early trading.
That left the MSCI’s broadest index of Asia-Pacific shares outside Japan at a six-month peak. The S&P 500 rose over 3 percent while Nasdaq soared 4.3 percent after the US and China agreed to slash tariffs for at least 90 days.
“The real win here was the shift in tone from both the US and China. Words like ‘mutual respect’ and ‘dignity’ mark a sharp departure from the recent confrontational rhetoric, and that’s what markets are cheering,” said Charu Chanana, chief investment strategist at Saxo in Singapore.
The US said it will cut tariffs imposed on Chinese imports to 30 percent from 145 percent while China said it would cut duties on US imports to 10 percent from 125 percent, providing relief to the markets, although concerns linger that tariffs could hurt the global economy.
The US dollar surged against the yen, euro and Swiss franc immediately after the agreement was announced but on Tuesday morning was slightly weaker, holding on to most of its gains.
Some analysts highlighted the uncertainty caused by the tariffs that remain in place.
“A de-escalation was inevitable and I think it’s clear there won’t be much durable that comes out of these talks,” said Christopher Hodge, chief US economist at Natixis.
“When all is said and done, tariffs will still be dramatically higher and will weigh on US growth.”
