US Treasury yields continued their ascent from six-month lows, gold hovered close to a two-and-a-half-week low and crude oil recovered from a nearly four-year low, as traders began shifting back to riskier assets from traditional safe havens.
A six per cent rebound in Japan's Nikkei far outpaced other regional markets, with Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer tasked with leading trade negotiations with Tokyo.
The Nikkei's close on Tuesday at 33,012.58, marked its sharpest daily percentage gain since August 6.
US business leaders have also begun speaking out about the damage to the economy and financial markets that could be wrought by President Donald Trump's global trade war, with JPMorgan Chase CEO Jamie Dimon warning on Monday of inflation and a US slowdown.
However, Trump dug in his heels over China, vowing additional 50 per cent levies if Beijing does not withdraw retaliatory tariffs on the United States. Beijing said on Tuesday it will never accept the "blackmail nature" of US tariff threats.
China's markets rose modestly on Tuesday after the country's sovereign wealth funds stepped in to buy shares.Â
China's Shanghai Composite index rallied 1.58 per cent to 3,145.55. The People's Bank of China set the so-called fixing at 7.2038 per US dollar, the weakest since September 2023, to raise the appeal of exports.
Hong Kong's Hang Seng index jumped 1.51 per cent to 20,127.68 as several Chinese state holding companies vowed to increase share investment and a slew of listed companies announced share buybacks.
The Chinese yuan fell to 7.3677 per dollar in the offshore market, the weakest in two months, before rebounding to be slightly stronger than Monday's close at 7.3393.
Chip-export-dependent Taiwan's benchmark tumbled five per cent, a day after suffering its worst fall on record.
Thai stocks dropped nearly six per cent in catch-up selling from a holiday on Monday, while Indonesia returned from a week-long holiday to nine per cent losses.
In Europe, shares rose from 14-month lows and markets in London, Paris and Frankfurt were up more than one per cent each, while oil held above four-year lows hit on Monday.
The European Commission said it had offered a "zero-for-zero" tariff deal to avert a trade war with the United States as EU ministers agreed to prioritise negotiations, while also striking back with 25 per cent tariffs on some US imports.
Safe havens the yen and the Swiss franc held near six-month highs on Tuesday while the US dollar nursed broad losses.
The US dollar eased 0.5 per cent to 147.08 yen.
The euro jumped 0.3 per cent to $US1.0943, and the UK sterling climbed 0.3 per cent to $US1.2757.
The 10-year Treasury yield was lower in London trade after jumping some 17 bps on Monday as it bounced from six-month lows.
Analysts said a number of reasons may have explained the sharp rise in US bond yields on Monday including investors selling their most liquid assets to make up for falls elsewhere.
On Tuesday, Japanese government bond yields rose off their own multi-month lows, with the 10-year yield up as much as 13 bps to 1.24 per cent.
Gold added 0.8 per cent to $US3,006 per ounce, although it was still well back from last Thursday's record peak at $US3,167.57, reached in the immediate aftermath of Trump's "Liberation Day" tariff announcement.
Brent crude futures slipped 0.7 per cent at $US63.71 per barrel, and US West Texas Intermediate crude futures dipped 0.6 per cent to $US60.33.
Cryptocurrency bitcoin rose 1.2 per cent to trade just below $US80,000, after bouncing off a five-month low of $US74,445.79 reached on Monday.
with DPA
