SYDNEY- Stock markets were enjoying a much-needed relief rally in Asia on Wednesday after President Donald Trump said he had no plans to fire the head of the Federal Reserve, and hinted at lower tariffs for China.
The dollar jumped across the board after Trump walked back on threats to dismiss Fed Chair Jerome Powell, which had badly shaken investor confidence in US assets.
Trump also reiterated he wanted to do a deal with China where tariffs would not be anywhere near 145 percent, but added that he would set the terms of a deal if Beijing did not enter talks.
Earlier on Tuesday, Treasury Secretary Scott Bessent had been reported saying he believes there will be a de-escalation in US-China trade tensions, but negotiations with Beijing have not yet started and would be a “slog”.
“While it is still early days, the mood in the market is evidently shifting and what was a strong ‘sell America’ vibe flowing through markets yesterday has in part reversed,” said Chris Weston, head of research at broker Pepperstone.
“Markets are becoming ever more conditioned to the President shooting from the hip and then reversing the stance like it was never a big issue.”
Investors reacted by buying back into beaten-down stocks and Japan’s Nikkei jumped 2.3 percent in early trade, while South Korea’s main index rose 1.2 percent.
MSCI’s broadest index of Asia-Pacific shares outside Japan added 0.3 percent.
