Asia Stocks Up on Auto Gains, Bonds Steady with Optimism on Tariffs

Asian stocks rose slightly higher on Tuesday, boosted by increases in automotive firms following US President Donald Trump's indication that he could provide exemptions on existing auto tariffs.

US Treasury bonds stabilized after rebounding overnight after last week's significant selloff, while the dollar kept losing appeal among investors

On Monday, Trump mentioned that he was thinking about altering the 25 percent tariffs placed on imports of foreign cars and auto parts from Canada, Mexico, and other regions. Those tariffs might increase the price of a car by thousands of dollars, and Trump mentioned that car manufacturers "need a little bit of time because they're going to make 'em here."

This came after Friday's decision to exclude smartphones, computers, and certain other electronics from Trump’s "reciprocal" US tariffs. However, his administration subsequently intensified investigations into semiconductor imports after Trump stated on Sunday that he would reveal their tariff rate within the week.

Investors seized any positive news available following last week's significant selling across markets and nudged shares up modestly. MSCI's most comprehensive index of Asia-Pacific stocks excluding Japan increased by 0.3 percent.

Japan's Nikkei increased by 1 percent, led by shares of automotive firms such as Toyota and auto parts supplier Denso, which were among the index's top performers. However, gains were restricted due to the uncertainty surrounding Trump's trade policies and his ongoing flip-flopping on tariffs, which continued to overshadow markets and the global economic forecast.

US futures fluctuated between declines and increases, ultimately closing lower following an overnight rise on Wall Street. Nasdaq futures and S&P 500 futures both declined by nearly 0.2 percent. In Europe, EUROSTOXX 50 futures dropped by 0.14 percent, whereas FTSE futures increased by 0.25 percent.