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Dollar index hits more than one-month low

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Nippon Steel ( NISTF ) up after Trump offers support for U.S. Steel

deal

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China-listed Apple ( AAPL ) suppliers fall after Trump's tariff

threats

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US, UK markets closed for public holidays on Monday

(Updates to afternoon Asia trading)

By Johann M Cherian

SINGAPORE, May 26 (Reuters) - Stock markets across Asia

were steady 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 in his erratic trade policy.

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 Britain 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 pointed 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.

Last Friday's comments were a reminder of Trump and the

administration's unpredictable and seemingly incoherent policies

and decision-making, Commerzbank said in a note.

On Monday, MSCI's broadest index of Asia-Pacific shares

outside Japan slipped 0.07%, while futures in

Europe and Germany indicated a higher open of

over 1.5%.

Among currencies, the euro appreciated 0.35% to $1.1404

- its highest since April 30 - while risk-sensitive

currencies of Australia and New Zealand

strengthened 0.37% and 0.45% respectively.

The dollar index, which measures the greenback

against a basket of currencies, touched its lowest level since

April 2022, with analysts saying the "Sell America" narrative is

still dominant.

"It still is largely a 'sell dollar story'," said

Christopher Wong, currency strategist at OCBC.

"The policy unpredictability surrounding Trump's tariffs

and of course, the erosion of the U.S. exceptionalism, this

could potentially still undermine sentiment and the confidence

in the medium term."

Trading volumes on Monday are expected to be thin given that

markets in the United States and Britain are closed due to

public holidays.

In Japan, the Nikkei rose, with Nippon Steel ( NISTF )

gaining 2.3% after Trump on Friday expressed support

for the company's $14.9 billion bid for U.S. Steel.

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 fell 0.7% on Monday, while

Hong Kong's Hang Seng Index dipped 1%. China-listed Apple ( AAPL )

suppliers took a hit after, after Trump threatened a

25% levy on all imported iPhones bought by U.S. consumers on

Friday.

Signs that the global economy is holding up

better-than-feared in the face of recession worries have been a

relief for markets overall. Inflation reports out of Japan and

Germany later this week, along the Fed's preferred personal

consumption expenditure data.

On the commodities front, crude prices traded higher, while

gold eased from a two-week high.