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South Korea stocks hit 10-month high after election

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Trade uncertainty weighs as deadline for US offers loom

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Investors pin hopes on Xi-Trump call this week

(Updates prices to Asia afternoon)

By Ankur Banerjee

SINGAPORE, June 4 (Reuters) - Asian equities rose on

Wednesday lifted by technology shares and the dollar drifted as

higher U.S. duties on steel and aluminium took effect, marking

the latest chapter in the trade war that has rattled the markets

for much of the year.

Investor focus has been on the pace of trade negotiations

and the lack of significant progress. Wednesday is the deadline

for U.S. trading partners to submit their proposals for deals

that might help them avoid Trump's hefty "Liberation Day"

tariffs from taking effect in five weeks.

European stock futures pointed to a higher open as

the European Central Bank kicks off its two-day policy meeting

where it is expected to cut rates on Thursday.

In Asia, South Korea's stocks and its currency

surged as liberal presidential candidate Lee

Jae-myung's election victory raised hopes of swift economic

stimulus, market reforms and easing policy uncertainty.

The benchmark KOSPI jumped more than 2% to its

highest since August 2024. That left the MSCI's broadest index

of Asia-Pacific shares outside Japan nearly 1%

higher.

Japan's Nikkei rose 0.8%, while Taiwan stocks

jumped 2% after artificial intelligence behemoth Nvidia ( NVDA )

boosted U.S. stocks on Tuesday.

Data showed U.S. job openings increased in April, but

layoffs picked up, indicating a slowing labour market as tariffs

impact the economic outlook.

Investor attention has been on a possible call between U.S.

President Donald Trump and Chinese leader Xi Jinping sometime

this week as tensions between the world's top two economies

simmer.

Trump on Friday accused China of violating a Geneva

agreement to roll back tariffs and trade restrictions. Beijing

said it would safeguard its interests and that the accusation

was groundless.

Chinese stocks rose on Wednesday with the blue chip index

up 0.58%, while Hong Kong's Hang Seng index

rose 0.56%.

"Markets may be desensitized to trade headlines, but

Trump-Xi talks remain in focus. A grand deal looks unlikely, yet

any escalation could still spark a bout of risk aversion," said

Charu Chanana, chief investment strategist at Saxo in Singapore.

Meanwhile, Trump signed an executive proclamation putting

into effect from Wednesday his surprise announcement last week

that he was taking the tariffs on steel and aluminium imports

that had been in place since March to 50% from 25%.

"We believe that the steel & aluminium tariffs are an

exemplar of other strategic tariffs that are coming and likely

to 'stick'," said Thierry Wizman, global FX & rates strategist

at Macquarie. "With that, there's still little impetus for a

U.S. dollar rally to take hold."

DOLLAR WEAKNESS

The on-again-off-again tariffs from Trump have led to

investors fleeing U.S. assets looking for safe havens, including

gold and other currencies, this year as they expect trade

uncertainties to take a toll on the global economy.

The Organisation for Economic Cooperation and Development

said the global economy is on course to slow from 3.3% last year

to 2.9% in 2025 and 2026, trimming its estimates from March,

mainly on the fallout from the Trump administration's trade war.

The dollar on Wednesday edged 0.18% higher against the yen

at 144.225. The euro was flat at $1.1368.

The dollar index, which measures the U.S. unit versus

six other major currencies, was at 99.31, not far from the

six-week low of 98.58 touched on Monday. The index is down 8.5%

this year.

In commodities, oil prices eased, weighed down by a

loosening supply-demand balance following increasing OPEC+

output and lingering concerns over the global economic outlook

due to tariff tensions.

Brent crude futures dipped 0.38% to $65.38 a barrel

while U.S. West Texas Intermediate crude was at $63.15

per barrel, down 0.41%.

Gold was little changed at $3,351.5 per ounce, taking

its gains for the year to an eye-popping 28% on safe-haven

flows.