Asian shares rise as risk mood returns in China

Chinese shares outperformed peers as the absence of further negative tariff shocks saw a return of risk appetite

Asian stocks advanced to a seven-week high, with lower Treasury yields driving risk sentiment in the absence of further global trade tensions. The yen benefited from a central banker’s hawkish comments.

The Euro Stoxx 50 futures climbed 0.5%, while the contracts on US stocks gained in Asian trading. A gauge of Asian equities rose for a third day with the region’s technology companies the biggest contributors. Chinese shares outperformed peers as the absence of further negative tariff shocks saw a return of risk appetite.

European traders will start Thursday with calm preceding over risk assets ahead of Bank of England’s monetary policy meeting outcome, where it is widely expected to slash interest-rate. Global markets experienced high volatility since Monday after President Donald Trump decided to impose and then defer tariffs on Canada and Mexico. The US went ahead with a 10% levy on all imports from China, which immediately retaliated by with some levies on US.

“Asian markets are taking a break from the previous uncertainties over US-China tariffs,” said Gary Ng, a senior economist at Natixis SA. “However, the Trump factor will continue to be a key source of volatility, and the potential for US-China relations will continue to drive investment flows,” he said.

The yen trimmed most of its gains against the dollar. Bank of Japan’s most hawkish board member Naoki Tamura told reporters that 1% is not the definitive level of neutral rate for the economy, while highlighting that upside risk to prices is rising gradually. The Japanese currency also faces fresh demand from hedge funds amid volatile trading in currency markets.

Treasuries dipped in Asian trading after rallying across the curve Wednesday. The US 10-year yield dropped nine basis points to 4.42% during the session while the policy-sensitive two-year yield declined three basis points to 4.18% — both the lowest since the middle of December.

Meanwhile, Treasury Secretary Scott Bessent said the Trump administration’s focus with regard to bringing down borrowing costs is 10-year Treasury yields, rather than the Federal Reserve’s benchmark short-term interest rate.

Elsewhere in Asia, Vietnam’s inflation quickened at its fastest pace in six months and Singapore said it will announce stock market measures soon.

In Europe, corporate earnings also boosted the sentiment ahead of start of trading. Societe Generale SA announced a €1.7 billion ($1.8 billion) investor payout for last year, as fourth-quarter profit beat expectations driven by a recovery in French retail banking.

Meanwhile, ArcelorMittal SA expects restocking to boost steel demand this year, even as surging Chinese exports weigh on global prices. ING Groep NV missed analysts’ estimates for profit in the fourth quarter.