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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

By Ankur Banerjee

SINGAPORE, June 4 (Reuters) - Asian stocks inched higher

on Wednesday and the dollar wobbled near six-week lows as

traders braced for higher U.S. duties on steel and aluminium,

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

markets for much of the year.

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 0.6%

higher.

Japan's Nikkei rose 0.8%, while Taiwan stocks

jumped 1.6% after artificial intelligence behemoth

Nvidia ( NVDA ) boosted U.S. stocks overnight.

Data on Wednesday 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 were little changed in early trading with the

blue chip index up 0.09%. Hong Kong's Hang Seng index

rose 0.27%.

"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.

Also in focus has been 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.

Trump signed an executive proclamation that puts into effect

from 0401 GMT on 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 was on the back foot, slipping 0.17%

against the yen at 143.72 and 0.1% against the Swiss franc

at 0.8227. The euro rose 0.15% to $1.1388.

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

six other major currencies, was at 99.11, 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 0.06% to $65.59 a barrel

while U.S. West Texas Intermediate crude was at $63.35

per barrel, down 0.09%.

Gold rose 0.5% to $3,369.59 per ounce, taking its

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