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Shares track Wall St, rise on possible shift in US trade

policy

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Chinese equities get off to mixed start

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Euro zone inflation data due later on Tuesday

By Rae Wee

SINGAPORE, Jan 7 (Reuters) - Asia shares rose on

Tuesday, tracking Wall Street's positive lead and as some

investors hoped incoming U.S. President-elect Donald Trump could

adopt a less aggressive tariff stance than promised when he

takes office.

The Washington Post reported on Monday that Trump aides were

exploring tariff plans that would be applied to every country

but only cover certain sectors deemed critical to national or

economic security, in what would have represented a marked shift

from promises Trump made during the 2024 presidential campaign.

While the news initially sent stocks rallying and the dollar

falling, Trump's subsequent denial on his Truth Social platform

reversed some of the U.S. currency's declines.

"No one really knows for sure what kind of tariffs or trade

policies the Trump administration will implement," said Khoon

Goh, head of Asia research at ANZ.

"It's still possible that what the Washington Post reported

is true. His officials and aides of course will go through and

come up with various options, but ultimately it's up to Trump to

decide.

"For now, he is still talking tough on tariffs. But we know

from experience from his first term that he is a person that is

open to doing deals. I think that's partly why markets at this

stage are not reacting too negatively."

MSCI's broadest index of Asia-Pacific shares outside Japan

was up 0.16% in the early Asian session, while

Japan's Nikkei jumped 2%, boosted by a rally in

technology stocks.

The dollar, meanwhile, hovered near a one-week low at 108.36

, nursing some of its losses from the previous session.

The euro and sterling pared some of their

sharp gains made overnight following the Washington Post report,

each falling 0.1% to trade at $1.0377 and $1.25085,

respectively.

In China, the CSI300 index reversed early losses

to last trade 0.12% higher, while the Shanghai Composite Index

fell 0.09%.

Hong Kong's Hang Seng Index dropped 0.43%.

China's main stock exchanges asked some large mutual funds

to restrict stock selling at the start of the year, three

sources familiar with the matter said, as authorities sought to

calm markets heading into a tricky period for the world's

second-largest economy.

DATA DUMP

Inflation figures from the euro zone later on Tuesday will

refine the outlook for more rate cuts from the European Central

Bank. Markets are pricing in slightly less than 100 basis points

worth of easing in 2025 for now.

The week is a busy one filled with various economic data

releases particularly from the United States, which will be

headlined by the December nonfarm payrolls report on Friday.

That will be previewed by data on ADP hiring, job openings

and weekly jobless claims.

Anything upbeat would support the case for fewer rate cuts

from the Federal Reserve, and markets have already scaled back

expectations to just 40 basis points for 2025.

Minutes of the Fed's last meeting due on Wednesday will

offer colour on their dot plot predictions, while there will be

plenty of live comment with several top policymakers speaking.

The prospect of a less aggressive Fed easing cycle this year

has in turn kept U.S. Treasury yields supported, with the

benchmark 10-year yield last at 4.6219%, after

rising to its highest since May in the previous session.

The two-year yield steadied at 4.2704%.

Elsewhere, the dollar notched a fresh six-month high against

the Japanese yen at 158.425.

The Canadian dollar last traded a touch weaker at

1.4345 per U.S. dollar, following a rally on Monday after

Canadian Prime Minister Justin Trudeau said he would step down

in the coming months.

"Should Canada move toward an early election in which a

Conservative-led government emerges, the CAD could appreciate,"

said Thierry Wizman, global FX and rates strategist at

Macquarie.

"This is based on the view that certain outcomes will likely

improve for Canada under a Conservative-led government, and even

in anticipation of a Conservative-led government."

In commodities, oil prices edged lower on Tuesday, with

Brent falling 0.37% to $76.02 a barrel, while U.S. crude

eased 0.46% to $73.22 per barrel.

Spot gold rose 0.18% to $2,640.49 an ounce.