Asian markets showed a mixed performance on Thursday after US President Donald Trump eased concerns about the Federal Reserve and offered conciliatory remarks regarding the ongoing trade dispute with China.
Earlier fears that Trump might dismiss Fed Chairman Jerome Powell—whom he has criticized for not lowering interest rates—had rattled investors and raised concerns about the independence of the US central bank. However, Trump said on Wednesday he had "no intention" of firing Powell, prompting a wave of relief across global markets.
Wall Street responded positively, with the S&P 500 rising by 1.7 percent. European markets also saw strong gains, with Frankfurt’s index jumping over three percent. The Financial Times reported that the US might also exclude car parts from some of the existing tariffs on Chinese imports in a move dubbed "destacking."
In Asia, Tokyo’s Nikkei surged 1.9 percent, while Sydney and Shanghai posted modest gains of 0.6 and 0.3 percent, respectively. However, Seoul slipped after South Korea reported an unexpected 0.1 percent economic contraction in the first quarter of 2025. Markets in Hong Kong and Taipei also closed slightly lower.
“Both US equities and government bonds have staged a relief rally over the past 24 hours, as concerns about Fed independence and the trade war have eased,” said Hubert de Barochez of Capital Economics. However, he warned the rally’s sustainability remains uncertain, given Trump’s unpredictable rhetoric.
Despite the apparent softening, tensions remain high. The US has slapped 145 percent tariffs on various Chinese goods, with China retaliating at 125 percent. Treasury Secretary Scott Bessent confirmed that no formal talks with Beijing are currently underway and called the current tariff levels "not sustainable."
Bessent also clarified that trade discussions with Japan include no currency targets, countering earlier suggestions from Trump that he prefers a stronger yen. Japanese envoy Ryosei Akazawa is expected to return to Washington for more talks on May 1.
Meanwhile, Nintendo shares jumped as much as 5.5 percent following news that its upcoming Switch 2 console is seeing "extremely high" pre-orders in Japan ahead of its June 5 release.
Key figures at 0300 GMT:
- Tokyo (Nikkei 225): up 1.9% at 34,868.63
- Hong Kong (Hang Seng Index): down 0.23% at 22,022.77
- Shanghai (Composite): up 0.26% at 3,304.97
- Euro/dollar: up at $1.1351 from $1.1317
- Pound/dollar: up at $1.3281 from $1.3257
- Dollar/yen: down at 142.78 from 143.49
- Euro/pound: up at 85.47 pence from 85.34
- WTI crude: down 0.05% at $62.24/barrel
- Brent crude: unchanged at $66.12/barrel
- New York (Dow): up 1.1% at 39,606.57
- London (FTSE 100): up 0.9% at 8,403.18
