SINGAPORE - Asian equities rose on Wednesday lifted by technology shares and the dollar drifted as higher US duties on steel and aluminium took effect, marking the latest chapter in the trade war that has rattled the markets for much of the year.
Investor focus has been on the pace of trade negotiations and the lack of significant progress. Wednesday is the deadline for US trading partners to submit their proposals for deals that might help them avoid Trump's hefty "Liberation Day" tariffs from taking effect in five weeks.
European stock futures pointed to a higher open as the European Central Bank kicks off its two-day policy meeting where it is expected to cut rates on Thursday.
In Asia, South Korea's stocks and its currency surged as liberal presidential candidate Lee Jae-myung's election victory raised hopes of swift economic stimulus, market reforms and easing policy uncertainty.
The benchmark KOSPI jumped more than 2 percent to its highest since August 2024. That left the MSCI's broadest index of Asia-Pacific shares outside Japan nearly 1 percent higher.
Japan's Nikkei rose 0.8 percent, while Taiwan stocks jumped 2 percent after artificial intelligence behemoth Nvidia boosted US stocks on Tuesday.
Data showed US job openings increased in April, but layoffs picked up, indicating a slowing labour market as tariffs impact the economic outlook.
Investor attention has been on a possible call between leaders of the United States and China sometime this week.
"Markets may be desensitized to trade headlines, but Trump-Xi talks remain in focus. A grand deal looks unlikely, yet any escalation could still spark a bout of risk aversion," said Charu Chanana, chief investment strategist at Saxo in Singapore.
Meanwhile, Trump signed an executive proclamation putting into effect from Wednesday his surprise announcement last week that he was taking the tariffs on steel and aluminium imports that had been in place since March to 50 percent from 25 percent.
"We believe that the steel & aluminium tariffs are an exemplar of other strategic tariffs that are coming and likely to 'stick'," said Thierry Wizman, global FX & rates strategist at Macquarie. "With that, there's still little impetus for a US dollar rally to take hold."
Dollar weakness
The on-again-off-again tariffs from Trump have led to investors fleeing US assets looking for safe havens, including gold and other currencies, this year as they expect trade uncertainties to take a toll on the global economy.
The Organisation for Economic Cooperation and Development said the global economy is on course to slow from 3.3 percent last year to 2.9 percent in 2025 and 2026, trimming its estimates from March, mainly on the fallout from the Trump administration's trade war.
The dollar on Wednesday edged 0.18 percent higher against the yen at 144.225. The euro was flat at $1.1368.
The dollar index, which measures the US unit versus six other major currencies, was at 99.31, not far from the six-week low of 98.58 touched on Monday. The index is down 8.5 percent this year.
In commodities, oil prices eased, weighed down by a loosening supply-demand balance following increasing OPEC+ output and lingering concerns over the global economic outlook due to tariff tensions.
Brent crude futures dipped 0.38 percent to $65.38 a barrel while US West Texas Intermediate crude was at $63.15 per barrel, down 0.41 percent.
Gold was little changed at $3,351.5 per ounce, taking its gains for the year to an eye-popping 28 percent on safe-haven flows.
