Pedestrians are reflected on a stock quotation board showing a graph of Nikkei share average outside a brokerage in Tokyo, Japan April 14, 2025. REUTERS
Summary
SINGAPORE, April 17 (Reuters) – Asian equities edged higher on Thursday, while the dollar firmed slightly as traders took stock of trade negotiations between the U.S. and Japan even as uncertainties around tariffs implemented by President Donald Trump kept sentiment fragile.
Investors were also digesting comments from Federal Reserve Chair Jerome Powell, who warned of the risk of slowing growth and rising prices due to tariffs, while gold prices scaled record highs again on safe-haven flows.
The spotlight stayed on technology shares after a bruising session on Wednesday in the wake of warnings from bellwethers Nvidia (NVDA.O), and ASML (ASML.AS),, and ahead of earnings from Taiwan’s TSMC (2330.TW), .
Japan’s Nikkei (.N225), opens new tab rose 0.7% while the yen weakened as Japan kicked off talks with the United States. Trump, who unexpectedly joined the negotiations, declared “big progress” in the discussions with lead Japanese negotiator Ryosei Akazawa.
Charu Chanana, chief investment strategist at Saxo, said markets are detecting signs of hope again in trade talks, with U.S.-Japan negotiations and China’s openness to discussions reviving risk appetite, especially in beaten-down, trade-sensitive markets.
“When the bar is low, even talks about talks can lift markets as investors rotate from fear to hope.”
In Asia, stock markets were mixed, after U.S. stocks closed sharply lower. South Korea’s benchmark index (.KS11), rose 0.7%, while Taiwan stocks fell 0.5%. European futures pointed to a subdued start.
Elsewhere, Powell said the Fed would wait for more data on the economy’s direction before making any changes to interest rates.
“Powell is between a rock and a hard place,” said Tom Graff, chief investment officer at Facet. “The Fed can’t act proactively to stem any potential economic weakness, given that tariffs are likely to also cause inflation.”
Chip stocks across the globe were pummelled on Wednesday after Dutch giant ASML warned that tariffs were increasing uncertainty around its outlook for 2025 and 2026.
Also weighing on sentiment was AI pioneer Nvidia warning of a $5.5 billion hit after Washington restricted exports of its AI processor tailored for China.
“The chipmakers are very cyclical, so if we go into recession for any reason that’s bad for chipmakers and we could see a contraction in demand,” said Chris Zaccarelli, chief investment officer at Northlight Asset Management.
“But there is also the implication that if there are tariff barriers or if there are short-term imposed costs, that could also lead to lower demand.”
Chinese stocks were tentative on Thursday, with the blue-chip stock index (.CSI300), little changed, while Hong Kong’s Hang Seng index rose 1.6%, led by a rebound in tech shares.
TRADE TALKS
Beyond chips, investor focus has been squarely on fast evolving trade policies under Trump as markets wait to see if new agreements are reached between the U.S. and its trade partners.
The uncertainty has hamstrung the dollar, with investors dumping U.S. assets, including Treasuries last week due to uncertainty over the erratic implementation of the trade levies.
This week though, Treasuries have been relatively stable. The benchmark U.S. 10-year Treasury yield was up 3 basis points at 4.311%.
The euro was 0.3% lower at $1.1367 but was close to the three-year high it touched last week ahead of the policy decision from the European Central Bank, where a rate cut is widely expected.
The dollar index , which measures the U.S. currency against six units, was slightly higher on the day at 99.562.
The yen touched a seven-month high earlier in the session before reversing to be 0.55% weaker at 142.64 per dollar after Japan’s economy minister Ryosei Akazawa said foreign exchange had not been discussed at the trade talks in Washington.
In commodities, the spotlight has been on gold prices as it racked up yet another record high, going as high as $3,357.40 per ounce earlier in the session due to safe-haven flows. Gold was last flat at $3,341.91 per ounce.
Oil prices extended gains on the prospect of tighter supply. Brent crude futures rose 0.93% to $66.46 a barrel and U.S. West Texas Intermediate crude was at $63.2 a barrel, up more than 1%.
Reporting by Ankur Banerjee in Singapore, Additional reporting by Purvi Agarwal in Bengaluru; Editing by Jacqueline Wong
