Asia stocks are higher across the board after the positive lead from US where President Trump confirmed aluminium and steel tariffs, but exempted NAFTA partners and was also said to be open to providing relief for allies. In addition, Asia-Pac risk appetite was further bolstered by geopolitical developments in which the South Korean National Security Office chief announced that North Korean Leader Kim is committed to denuclearization and will refrain from conducting further tests, with President Trump and North Korea’s Kim to meet by May. As such, ASX 200 (+0.4%) is positive but with upside capped by a subdued commodities sector and Nikkei 225 (+0.7%) initially led the region on JPY outflows, while KOSPI (+1.3%) is the outperformer on the improved inter-Korean ties. Elsewhere, Hang Seng (+0.7%) is underpinned alongside the broad optimism in the region, while Shanghai Comp. (-0.1%) lags after further PBoC inaction leading to a net weekly drain of CNY 240bln, with participants also digesting US tariffs as well as mixed Chinese lending and inflation data.
In FX markets, the heightened risk-appetite spurred outflows from safe-haven JPY which underpinned USD/JPY closer towards the 107.00 handle and saw similar outperformance for JPY-crosses. Elsewhere, KRW found support on the news of North Korea’s commitment to denuclearization but with gains limited as some scepticism remained, while USD, CAD and MXN are all firmer as some trade concerns abated after President Trump exempted Canada and Mexico from tariffs and amid hopes other allies may be given relief.
Finally, 10yr JGBs are flat with markets focused on riskier assets and as participants await today’s BoJ announcement.