Asian Shares Rise as U.S.-China Tariff Pause Eases Trade Tensions

Asian shares edged up in early August as regional markets absorbed a temporary pause in U.S.-China trade tensions. The respite, triggered by President Donald Trump’s executive order delaying scheduled tariff increases by three months, provided a short-term lift to risk appetite. Japan’s Nikkei 225 led the charge, jumping 2.6% to a record high of 42,942.14, driven by strong performances in blue-chip stocks such as Toyota Motor Corp., which rose 3.3%. South Korea’s Kospi also gained 0.6%, while Australia’s S&P/ASX 200 moved slightly higher by less than 0.1%. On the mainland, the Shanghai Composite edged up 0.3% to 3,658.62, though Hong Kong’s Hang Seng Index initially dipped before recovering to close nearly flat [1].

The reprieve from escalating trade conflict provided a buffer for U.S. and Chinese officials to pursue negotiations, with Beijing indicating it would match Washington’s delay in tariff increases. However, analysts emphasized that the extension was not a sign of goodwill but rather a strategic pause to keep dialogue open [2]. Stephen Innes of SPI Asset Management noted that the decision “is about keeping oxygen in the room for deals that matter,” highlighting the delicate balance between easing immediate pressures and maintaining long-term leverage.

Meanwhile, the U.S. dollar held its gains against major currencies, with the dollar index trading at 98.497 after rising 0.5% over two sessions. The greenback’s resilience came amid speculation about how an upcoming release of U.S. July inflation data might influence the Federal Reserve’s policy path. Traders observed that the dollar’s strength was also bolstered by the broader expectation of a three-month tariff delay, which had been widely anticipated [3].

In the U.S., equities slipped on Monday as investors awaited key inflation figures. The S&P 500 fell 0.3% to 6,373.45, the Dow dropped 0.5% to 43,975.09, and the Nasdaq declined 0.3% to 21,385.40. Economists forecast a year-over-year rise in consumer prices to 2.8%, marginally above June’s 2.7% [4]. The market’s cautious stance reflected uncertainty over how rising inflation might constrain the Fed’s ability to ease monetary policy.

In the foreign exchange market, the U.S. dollar ticked up 0.1% against the yen to ¥148.28, while the euro hovered near $1.1615. Investors remained focused on the potential for U.S. inflation to dictate the Fed’s next move, with the possibility of rate cuts still in play depending on data outcomes [5].

Notable developments in the tech sector also influenced market sentiment. A U.S. official reported that chipmakers like Nvidia and AMD had agreed to allocate a portion of their China-related sales revenue to the U.S. government in exchange for export licenses for advanced semiconductors. This arrangement highlighted the continued intertwining of trade and technology policy, even as the broader U.S.-China trade standoff appeared to ease temporarily [6].

As the market prepared for the release of the July CPI data, the broader economic landscape remained in focus. In China, factory-gate prices fell unexpectedly in July, and consumer prices remained flat, signaling weak domestic demand and ongoing economic uncertainty [7]. In contrast, Australia and New Zealand posted modest gains, with the S&P/ASX 200 rising 0.4% and the S&P/NZX-50 climbing 0.5%, as investors speculated about potential policy easing from the Reserve Bank of Australia [8].

Overall, Asian equities reflected a nuanced outlook, with gains supported by strong corporate earnings in the tech sector and cautious optimism ahead of key U.S. data releases. The market remained attuned to the evolving trade and inflation landscape, balancing near-term relief from the U.S.-China pause with longer-term uncertainties over policy developments and global economic trends.

Source:

[1] https://www.wsoctv.com/news/asian-shares-advance/WNVNIHFPMZA3PESQ75C5FHTZRY/

[2] https://www.reuters.com/world/china/global-markets-wrapup-1-2025-08-11/

[3] https://www.mitrade.com/insights/news/live-news/article-3-1027915-20250811

[4] https://www.rttnews.com/3564383/asian-shares-edge-up-in-thin-holiday-trading.aspx