Asian stocks climb as investors balance US-China trade tensions 

Asian markets rose on Thursday as investors balanced renewed US-China trade tensions with expectations that the Federal Reserve will deliver further interest rate cuts this year.

Markets have been volatile this week after US President Donald Trump reignited tariff fears on Friday, threatening 100 percent duties on Chinese imports in response to Beijing’s recent restrictions on rare-earth exports. Although Trump later softened his tone, the renewed exchange of threats has raised concerns about the fragile truce that has helped stabilize global markets in recent months.

Speaking to reporters on Wednesday, Trump said the United States and China were “in a trade war,” adding, “We have a 100 percent tariff. If we didn’t have tariffs, we would be exposed as being a nothing.”

However, Treasury Secretary Scott Bessent struck a more diplomatic note, suggesting Washington could extend the current three-month suspension of tariffs if progress is made toward resolving the rare-earth dispute. “Is it possible that we could go to a longer roll in return for a delay? Perhaps,” he said, adding that negotiations would continue in the weeks leading up to the Asia-Pacific Economic Cooperation (APEC) summit in South Korea.

Bessent also confirmed that Trump still intends to meet Chinese President Xi Jinping at the APEC summit, despite rising tensions. Analysts described the contrasting messages from Trump and Bessent as a coordinated effort to maintain both pressure and flexibility in trade talks.

“Trump’s declaration that the US is ‘in a trade war’ with China set the tone,” said Stephen Innes of SPI Asset Management. “Meanwhile, Bessent, the newly minted ‘cop of calm,’ suggested a possible extension to the 90-day tariff truce if Beijing holds off on rare-earth restrictions. For a market addicted to ambiguity, that’s the perfect cocktail — one part anxiety, one part relief.”

Asian markets followed Wall Street higher, with most bourses in positive territory. Tokyo, Hong Kong, Shanghai, Sydney, Seoul, Wellington, Taipei, and Manila all posted gains as traders focused on the prospect of more rate cuts from the Federal Reserve.

The Fed’s latest “Beige Book” survey pointed to a softer US job market, reinforcing weak economic data in recent weeks and fueling expectations of further rate reductions. Fed Chair Jerome Powell also warned this week that “downside risks to employment appear to have risen.”

Despite the optimism, analysts at Bank of America urged caution, citing persistent uncertainties around inflation, growth, and policy. “Risks are not all gone,” the bank wrote, noting ongoing trade tensions and weak job growth.

Meanwhile, gold prices surged to a record $4,234.70 per ounce, supported by safe-haven demand, a weaker dollar, and speculation of lower US interest rates. India’s rupee also extended gains after a sharp rebound from near-record lows, aided by central bank intervention, lower crude prices, and renewed foreign inflows.

Key figures at around 0230 GMT

Tokyo - Nikkei 225: UP 0.9% at 48,088.07 (break)
Hong Kong - Hang Seng Index: UP 0.2% at 25,953.67
Shanghai - Composite: UP 0.1% at 3,914.85
Euro/dollar: UP to $1.1670 from $1.1645
Pound/dollar: UP to $1.3436 from $1.3400
Dollar/yen: DOWN to 150.54 yen from 151.24 yen
West Texas Intermediate: UP 0.8% at $58.71 per barrel
Brent North Sea Crude: UP 0.7% at $62.34 per barrel
New York - Dow: FLAT at 46,253.31 (close)
London - FTSE 100: DOWN 0.3% at 9,424.75 (close)