(Sharecast News) - Asia-Pacific markets closed mixed on Tuesday as investors assessed the impact of the US-China trade agreement that sparked a rally on Wall Street overnight.
The deal included a 90-day pause on tariffs and a substantial 115 percentage point reduction in reciprocal levies, which analysts at Nomura described as "much larger than expected" and likely to support global equity sentiment in the near term.
Nomura subsequently upgraded Chinese equities to a "tactical overweight" while trimming its overweight position on India.
"Most Asian stock markets experienced gains, buoyed by a surge in US equities, as optimism surged that the US-China trade agreement signals the conclusion of a full-scale tariff conflict," said TickMill market strategy partner Patrick Munnelly.
"Japanese stocks led the region's increases, with the Topix rising for the 13th consecutive day, while major indexes in Australia and Taiwan also saw advances.
"Meanwhile, the Hang Seng Index declined alongside US stock futures after both had surged on Monday."
Munnelly noted that Treasuries gained slightly in Asia, while the dollar weakened.
"The widespread return of risk appetite follows a Monday announcement by trade negotiators from the world's two largest economies that indicated a decrease in tariffs.
"In a meticulously coordinated joint statement, the US reduced duties on Chinese goods from 145% to 30% for a period of 90 days, while Beijing lowered its tax on most products to 10%.
"The optimism surrounding the US-China discussions led to the S&P 500 Index soaring by 3.3% on Monday, surpassing its level prior to president Donald Trump's announcement of extensive tariffs on 2 April."
Japan leads the risers on mixed day for markets
In Japan, the Nikkei 225 advanced 1.43% to close at 38,183.26, led by gains in Furukawa Electric, which surged 13.84%, Denka up 9.84%, and Mitsubishi Motors rising 8.34%.
The broader Topix index climbed 1.1% to 2,772.14.
Australia's S&P/ASX 200 rose 0.43% to 8,269.00, supported by a 17.99% jump in Appen, a 14.38% rise in Polynovo, and a 9.94% gain in Corporate Travel Management.
New Zealand's S&P/NZX 50 added 0.87% to finish at 12,786.74, with Serko up 5.99%, Investore Property up 4.46%, and Mainfreight up 4.24%.
Chinese mainland markets were more subdued - the Shanghai Composite edged up 0.17% to 3,374.87, while the Shenzhen Component dipped 0.13% to 10,288.08.
Among the steepest fallers in China were Harson Trading China, down 9.16%, Beijing Vantone Real Estate, down 9.14%, and Shanghai Huitong Energy, down 9.11%.
In Hong Kong, the Hang Seng Index dropped 1.87% to 23,108.27, dragged lower by Sunny Optical Technology Group, which fell 7.64%, BYD Electronic International down 6.85%, and Meituan losing 4.84%.
South Korea's Kospi 100 slipped 0.03% to 2,600.40.
Weakness came from EcoPro Materials, which fell 4.71%, Korea Zinc down 4.66%, and Korea Electric Power Corporation down 4.28%.
In currency markets, the dollar was last down 0.39% on the yen, trading at JPY 147.88, as it fell 0.53% against the Aussie to AUD 1.5610 and dropped 0.55% on the Kiwi to change hands at NZD 1.6984.
Oil prices were little changed, with Brent crude futures last down 0.05% on ICE at $64.93 per barrel, and the NYMEX quote for West Texas Intermediate up 0.02% at $61.96.
BoJ could pause interest rate hikes if US economy slows
In central bank news, the Bank of Japan could consider pausing its interest rate hikes if the US economy showed signs of slowing, according to a summary of views from its 1 May policy meeting.
One board member warned that US tariff policies could weigh on Japan's economy by pressuring companies to cut costs excessively, limit wage growth, reduce investment, and risk industrial decline.
However, another member urged caution against being overly pessimistic and argued the BoJ should remain prepared to raise rates in response to shifts in US policy.
Reporting by Josh White for Sharecast.com.
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