Japan, Korea stock markets surge up to 8%; China gains on stimulus hopes

The US President Donald Trump's decision to put a halt on 'Liberation Day' tariffs for 90 days lifted Asian markets from Tokyo to Seoul. Chinese mainland indices also gained amid reports Chinese leaders were set to discuss a stimulus package amid a tit-for-tat tariff war with the US that saw their exports attracting 125 per cent tariffs in the US, following Trump's latest order. 

Japan's Nikkei 225 climbed 8.66 per cent to 34,450. Korea's Kospi advanced 5.69 per cent to 2,424.08. Australia's S&P/ASX 200 jumped 4.69 per cent to 7,721. Hong Kong's Hang Seng and mainland China's Shanghai Composite index added 1.71 per cent and 0.93 per cent respectively.  

Sources told Bloomberg that China’s top leaders would meet today to discuss additional economic stimulus following the increase in US tariffs.  The ad-hoc meeting is set to focus on support measures for housing, consumer spending and technological innovation

"In our view, the US and China are locked in an unprecedented and costly game of brinkmanship, where neither side has displayed any willingness to back down. Tensions could rise further in the very near future, and developments are clearly progressing in the direction we have been flagging since late February," Nomura said in its latest note.  

In another note, Nomura said Beijing would likely vow to speed up and increase fiscal spending to bolster demand, especially consumption demand. Nomura said China’s stabilisation funds, supported by the PBoC, are likely to intervene significantly in stock markets over the coming weeks. PBoC, in addition to funding the national teams, could also implement high-profile RRR cuts and policy rate cuts sooner than what had been planned, it suggested.

In a post on Truth Social, Trump said he raised the tariff charged to China by the US to 125 per cent effective immediately, following the "lack of respect" that China showed to the world’s markets. He hoped China would realise that "the days of ripping off the USA, and other countries, is no longer sustainable or acceptable," he said. 

Trump said more than 75 countries called Representatives of the United States to negotiate a solution to trade, trade barriers, and tariffs, among others.  He said the fact that those countries did not, at his strong suggestion, retaliated, he authorised a 90 day pause and a substantially lower reciprocal tariff of 10 per cent for the period.

The domestic stock exchanges BSE and NSE were shut on Thursday on account of Shri Mahavir Jayanti. The trading will resume on Friday.