Asian Market Gaining Momentum after days of Tariff Battling

SINGAPORE, May 2 (Reuters) – Asian equity markets and U. S. futures advanced on Friday as indications emerged of potential trade discussions between the U. S. and China, which improved risk appetite after unimpressive earnings from major tech companies Apple and Amazon raised concerns about the repercussions of tariffs.

China’s commerce ministry stated on Friday that the United States has repeatedly shown its readiness to negotiate on tariffs and that Beijing is open to talks.

These remarks assisted U. S. stock futures in reversing previous declines after Apple (AAPL. O), opens new tab reduced its share repurchase plan and cautioned that tariffs might increase costs by approximately $900 million this quarter.

Futures for the S&P 500 increased by 0. 6%, while those for Nasdaq were up 0. 3%. Japan’s Nikkei (. N225), opens new tab rose by 1% due to a weaker yen, and Taiwanese stocks (. TWII), opens new tab soared by 2%.

MSCI’s broadest index of Asia-Pacific shares outside Japan (. MIAPJ0000PUS), opens new tab gained 0. 4%.

“They’ve adopted a cautious stance, insisting that the U. S. ‘demonstrate sincerity’ if they wish to engage in trade discussions,” remarked Matt Simpson, senior market analyst at City Index.

“So while a peace offering has been made, one cannot confidently assert that China has ‘come crawling’ as Trump had anticipated. “

Nonetheless, investor sentiment improved following the comments as markets continue to contend with President Donald Trump’s unpredictable tariff policies that have incited concerns of a significant global economic downturn.

Data released this week indicated that the U. S. economy contracted for the first time in three years in the first quarter, whereas China’s manufacturing activity declined at the quickest rate in 16 months in April.

Joseph Capurso, head of international and sustainable economics at Commonwealth Bank of Australia, mentioned that the primary effect of tariffs on the economy will be experienced when consumer prices rise.

“A recession could become probable if price hikes prompt consumers to reduce spending and businesses to downsize workforces and cut capital expenditures. Although a recession is not our primary expectation, it will be a close call this year. “

The earnings season thus far has highlighted the impact of the swiftly changing U. S. trade policy, leading many companies to cut or withdraw their profit projections.

However, even as investors felt disillusioned by the earnings reports from Apple and Amazon, robust results from Microsoft (MSFT. O), opens new tab and Meta Platforms (META. O), opens new tab earlier in the week had fostered optimism that the tech sector could endure the tariff challenges.

In the currency markets, the Japanese yen fell to its lowest point since April 10 on Friday, a day after the Bank of Japan reduced growth forecasts due to U. S. tariffs and maintained interest rates. It was last recorded at 145. 62 per dollar.

Fred Neumann, chief Asia economist at HSBC, stated that the effects of tariff uncertainty on the global economy could present indirect challenges to growth in Japan.

“The BOJ is keeping the door open for more rate increases; however, currently, the door is only slightly ajar. ”

That put the U. S. dollar on track for its best weekly showing since the end of February ahead of the important non-farm payrolls report later in the day. The dollar index, which compares the U. S. currency to six other currencies, was last recorded at 100. 14.

Nonfarm payrolls probably rose by 130,000 jobs last month following an increase of 228,000 in March, according to a Reuters survey of economists.

Japanese Finance Minister Katsunobu Kato stated on Friday that the nation’s substantial holdings of over $1 trillion in U. S. Treasuries are amongst the resources Tokyo can utilize in trade discussions with the United States.

This statement followed a meeting between Japan’s chief trade negotiator Ryosei Akazawa and U. S. Treasury Secretary Scott Bessent in Washington for the second round of bilateral tariff discussions.

In the commodities market, gold prices fell to $3,234. 9 per ounce, heading for its poorest weekly performance in two months due to decreasing safe-haven demand.

Oil prices surged after Trump threatened additional sanctions on Iran. Brent crude futures increased by 0. 56%, while U. S. West Texas Intermediate crude futures rose by 0. 6%.