Asian stock markets mostly rose on Wednesday, extending recent gains as concerns over the impact of U.S. President Donald Trump’s planned trade tariffs eased. Regional technology stocks mirrored the gains seen in their U.S. counterparts.
Australian shares led the day’s performance after inflation data came in weaker than expected, fueling expectations of more interest rate cuts by the Reserve Bank of Australia (RBA).
Hong Kong’s stock market recovered from Tuesday’s losses, while Japan’s shares pared early gains following comments from Bank of Japan Governor Kazuo Ueda, who signaled the possibility of further interest rate hikes.
Positive Sentiment from Wall Street, But Tariff Uncertainty Remains
Asian markets took some cues from Wall Street, which ended slightly higher on Tuesday, driven by strong performances in major tech stocks. However, uncertainty surrounding Trump’s tariffs and weak consumer confidence data limited broader market gains.
U.S. stock index futures also saw slight increases in Asian trade after Trump said in a Newsmax interview that he might adopt a more lenient stance with his upcoming tariffs on April 2, though he emphasized that he did not want too many exceptions.
Earlier reports indicating that Trump’s tariffs may be less severe than expected helped support Asian markets this week. However, investors remained cautious due to uncertainty about the exact scope and impact of the tariffs.
Australia’s Inflation Data Boosts Rate Cut Expectations
Australia’s ASX 200 rose 0.7% following consumer price index (CPI) inflation data for February, which came in slightly below expectations. This, along with easing underlying inflation, increased speculation that the RBA may further cut interest rates.
This report came just a week after weaker-than-expected labor data, raising expectations that the central bank could ease monetary policy. The RBA will meet next week after cutting rates for the first time in nearly five years in February.
The central bank has taken a data-driven approach to monetary policy, with high inflation and a tight labor market as key concerns. Analysts at Capital Economics predict the RBA will likely hold rates steady next week, but the soft inflation data leaves room for at least two additional rate cuts this year.
Hong Kong Recovers, Japan’s Market Holds Steady Amid Rate Hike Concerns
In Hong Kong, the Hang Seng index rose 0.6%, bouncing back from recent losses. The index had been weighed down by profit-taking after reaching three-year highs. Tech stocks also gained, following the trend seen in the U.S.
Investors continued to focus on developments related to China’s artificial intelligence capabilities and the country’s plans for additional stimulus. Meanwhile, the Shanghai Shenzhen CSI 300 and Shanghai Composite indexes fell slightly amid concerns over potential new U.S. trade measures against China.
In Japan, the Nikkei 225 and TOPIX indexes rose 0.3% and 0.2%, respectively, although they trimmed early gains. The pullback followed comments from Bank of Japan Governor Ueda, who indicated that the central bank would continue raising interest rates if the economy remains stable.
Japanese producer inflation, as measured by the corporate services price index, eased slightly in February, but remained high at 3%, according to the latest data.
Other Asian Markets Perform Well
Elsewhere in Asia, South Korea’s KOSPI gained 0.6%, led by strong performance in local chipmaking stocks, which tracked gains in their U.S. counterparts.
Singapore’s Straits Times index rose 0.3%, following a record high earlier in the week. Meanwhile, futures for India’s Nifty 50 index suggested a slightly positive open, with the recent rebound in the index showing signs of cooling.
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