After the Trump administration released space for tariff negotiations, market confidence has been restored. On Tuesday, April 8th, Asian stock markets rebounded from a year and a half low, with Japan’s Nikkei index soaring by 5.6% and US stock futures also rising simultaneously, indicating a significant stabilization in investor sentiment.
US treasury bond yields have continued to rise from a six-month low, while gold prices have hovered near a two and a half week low and oil has rebounded from a near four-year low. Investors are shifting from safe-haven assets to higher risk assets.
The Nikkei 225 index in Japan surged by 5.6%, significantly outperforming other markets in Asia. Finance Minister Scott Bessent and US Trade Representative Jamieson Greer have been appointed to lead trade negotiations with Japan.
Tapas Strickland, Market Economics Director at the National Australia Bank, stated, “It is noteworthy that a ray of light is starting to appear, indicating that the US may indeed have the intention to engage in trade negotiations.”
Strickland noted that the most important signal is the appointment of Finance Minister Bessent to lead negotiations with Japan, suggesting that Japan may become a priority for talks.
However, he also pointed out that market volatility remains high, with the VIX index, which measures market fear, surging to 60 at one point.
Nevertheless, Trump has maintained a tough stance towards China, threatening to impose an additional 50% tariff if Beijing does not withdraw retaliatory tariffs on the US. In response on Tuesday, China declared that they will not accept tariff threats from the US.
Despite this, the Hang Seng Index in Hong Kong rose by 1.7% in early trading, and the Shanghai and Shenzhen 300 Index in mainland China increased by 0.6%. The offshore yuan depreciated to 7.36 yuan per US dollar, its lowest level in two months.
On Tuesday, the South Korean KOSPI index rose by 1.3% and the Australian S&P/ASX 200 index increased by 1%.
In contrast, the Taiwan Weighted Index fell by 3% on Tuesday, continuing the 10% historic drop recorded on Monday. The export-driven economy is facing a high tariff of 32% from the US, compounded by market adjustments due to last week’s market closure for the Qingming Festival.
European STOXX 50 futures surged by 2.2%.
US S&P 500 index futures rose by 0.9%, while the spot index fluctuated significantly during the day and closed with a slight 0.2% decline, indicating investor expectations of a market rebound in the near term.
Gold prices were hovering around $2,985 per ounce, significantly lower than the historical high of $3,167.57 reached when Trump announced global tariff policies last week.
After hitting a near four-year low on Monday, oil prices rebounded strongly. Brent crude oil futures rose by 1.26% to $65.02 per barrel, and US WTI crude oil futures increased by 1.52% to $61.61.
On Tuesday, US 10-year Treasury bond yields rose by 6 basis points to 4.216%, following a sharp increase of 17 basis points on Monday from a six-month low.
This also led to an increase in Japanese government bond yields, with the 10-year yield rising by 12.5 basis points to 1.235%.
On Monday, Wall Street investors continued to battle between long and short positions amid tariff-related news. A report claiming that Trump is considering postponing tariff imposition on all countries except China for 90 days briefly lifted US stocks, but the report was later confirmed by the White House to be false.
However, a White House official revealed to the Financial Times that the US is open to negotiations with “countries willing to engage” and is prepared to discuss “flexible arrangements.” This indicates that the Trump administration may be willing to offer tax rate adjustments or exemptions for individual countries.
Chris Weston, Research Director at Pepperstone, stated, “Various signs indicate that as long as the market hears what they want to hear, there is an opportunity for risk assets to surge.”
“However, overall, the news on that day did not have a positive impact, and the news that the market most wanted to believe was confirmed to be untrue,” he added, “I believe this rebound is more of a technical rebound in a bear market, and investors should be cautious and not mistake the trend as a turning point towards an uptrend.”
The European Commission stated on Monday that they have proposed a draft agreement of “zero tariffs for zero tariffs,” meaning both sides would exempt certain imports from tariffs to prevent a full-scale trade war with the US.
European Commission President von der Leyen mentioned that the EU is ready to achieve a “zero tariffs for zero tariffs” agreement with the US for cars and industrial products.
However, in order to protect their own interests, the EU is also prepared for countermeasures. A vote on the first batch of retaliatory tariffs against the US is scheduled for April 9th, with a 25% tariff planned on $28 billion worth of US goods, including dental floss and diamonds, starting on April 15th. The second wave of tariffs will target US cars and other goods, and is expected to be implemented from May 15th onwards.