US-China tensions raise fears of a fresh tit-for-tat trade war
An electronic board displays the Tokyo stock index at a securities office in Tokyo, Japan. Picture: EPA/KIMIMASA MAYAMA
Australian shares rose 2.22% to the firmest in more than two months, while Japan’s Nikkei stock index rose 2.01% to the highest since late February as investors cheered the reopening of economic activity in both countries. “The overall tone is in support of risk-on trades, and we can see less short-selling and more willingness to test the upside in equities,” said Yukio Ishizuki, FX strategist at Daiwa Securities in Tokyo.
The S&P 500 has leapt about 36% since the global coronavirus pandemic dragged it to the year’s low on March 23, but there are concerns the rally may be overdone and susceptible to a protracted pullback. Some investors worry a punitive US response to China on the issue of Hong Kong could result in a tit-for-tat reaction from Beijing, further straining ties between the world’s two biggest economies and further hobbling global growth.
President Donald Trump said he will announce a response to China’s policies towards Hong Kong later this week.
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