By Johann M Cherian

SINGAPORE (Reuters) - Stock markets across Asia edged higher on Monday, and the euro rallied after President Donald Trump abruptly extended by more than a month his threat to slap 50% tariffs on EU goods, marking another temporary reprieve as part of his erratic trade policy.

On Sunday, Trump agreed to extend his deadline for trade talks until July 9, from the June 1 deadline he set on Friday, after European Commission President Ursula von der Leyen said the bloc needed more time to "reach a good deal."

Market sentiment had been steadying after a sharp selloff across most assets last month as Trump paused his growth-denting tariffs and investors were keen on fresh trade deals after a pact with UK and a temporary agreement with China.

However, Trump's latest policy moves were a reminder to investors how quickly circumstances could change and analysts have been pointing out that investors are shifting their money out of the U.S. to Europe and Asia as they price in a possible U.S. recession and a consequent global slowdown.

"(The tariffs are) well above the 20% original reciprocal tariff on the EU. The U.S., EU, and China account for 60% of global GDP and so this escalation bodes ill for the entire world," analysts at Brown Brothers Harriman said in a note.

Apple ( AAPL ) was also caught in the trade crossfire on Friday, after Trump threatened a 25% levy on all imported iPhones bought by U.S. consumers.

On Monday, MSCI's broadest index of Asia-Pacific shares outside Japan inched up 0.12%, while Japan's Nikkei was marginally higher.

Trading volumes on Monday are expected to be thin given that markets in the United States and the United Kingdom are closed due to public holidays.

Japan's Nippon Steel's ( NISTF ) jumped 4.3% after Trump on Friday expressed support for the company's $14.9 billion bid for U.S. Steel, saying their "planned partnership" would create jobs and help the American economy. Shares of U.S. Steel soared 21% on Friday.

Super-long Japanese bonds will be in focus, with inflation data expected later in the week as investors try to gauge the Bank of Japan's monetary policy outlook. Yields on the tenors hit record levels last week.

Ballooning debt levels in developed economies were also brought back into focus following Moody's credit rating downgrade of the United States and weak debt auctions in the U.S. and Japan last week.

China's blue-chip index slipped 0.2% in early trading on Monday, while Hong Kong's Hang Seng Index dipped 0.4%.

Among currencies, the euro strengthened 0.3% to $1.1397 to touch its highest since April 30, while the greenback recovered as much as 0.3% to 143.085 yen, after diving 1% on Friday. [FRX/]

On Wednesday, an earnings report from artificial intelligence bellwether Nvidia ( NVDA ) will be in the spotlight - the last of the "Magnificent Seven" group of growth stocks that had spearheaded a more than two-year U.S. bull market.

Analysts said the semiconductor giant's quarterly report could be the next catalyst for markets, given its forecasts are seen as an indication of demand for tech infrastructure.

Nvidia's ( NVDA ) shares are down more than 2% this year after investors took notice of cheaper Chinese AI models in the aftermath of DeepSeek's release, while CEO Jensen Huang has flagged that U.S. export curbs will also hit sales.

Reuters reported on Saturday that Nvidia ( NVDA ) will launch a new AI chipset for China at a significantly lower price, subject to U.S. government approval.

On the commodities front, crude prices traded higher, while gold eased marginally from a two-week high. [GOL/] [O/R]