HONG KONG, May 28, (V7N) – Asian equities experienced a broad uplift on Wednesday, mirroring a strong Wall Street rally, as traders welcomed better-than-forecast US consumer confidence data and a decline in bond yields. Market attention is now turning to a crucial sale of Japanese government debt.

New York investors, returning from a long weekend, were in a positive mood after US President Donald Trump announced on Sunday a delay until July for the 50 percent tariffs on European Union imports that he had unexpectedly declared last Friday, which had sparked a market rout. The delay assuaged concerns about a fresh escalation in global trade tensions, which have consistently rattled market sentiment. Further boosting optimism, Trump posted on social media that progress was being made in discussions with Brussels, stating, "I have just been informed that the E.U. has called to quickly establish meeting dates... This is a positive event, and I hope that they will, FINALLY, like my same demand to China, open up the European Nations for Trade with the United States of America."

Markets also reacted positively to data from the Conference Board, which showed a larger-than-expected jump in US consumer confidence in May. This marked the first improvement after five consecutive months of decline, pulling the index up from lows not seen since the onset of the Covid-19 pandemic. The rebound was largely attributed to the easing of trade tensions, particularly with China, although the report did caution that tariffs remained a key concern.

Across Asia, major indexes saw gains. Hong Kong, Shanghai, Sydney, Seoul, Singapore, Taipei, Manila, and Jakarta all rose. Wellington was an outlier, dipping despite New Zealand's central bank implementing its sixth consecutive interest rate cut.

Tokyo also edged higher as investors closely watched the outcome of a crucial sale of Japanese 40-year government bonds. This auction followed a weak take-up for 20-year notes earlier in the month, the worst in over a decade. Government bond yields globally have surged in recent weeks amid concerns about rising government spending and Trump's earlier April 2 tariff blitz. However, Japanese yields tumbled on Tuesday after the Ministry of Finance reportedly sent a questionnaire to market players regarding issuance, fueling speculation that it might reduce its sales, thereby decreasing supply.

Masahiko Loo, senior fixed income strategist at State Street Global Advisors, commented that the recent "panic" over the Japanese government bond (JGB) market might have been overdone. He reiterated his long-standing view that "the challenges in the JGB market are technical rather than structural," and that they are "largely addressable through adjustments in issuance volume or composition." Loo also stressed that the concern about "loss of control over the super-long end is overblown," given that "around 90 percent of JGBs are domestically held, and the 'don't fight the BOJ/MOF' mantra remains a powerful anchor." He anticipates these imbalances to be resolved as early as the third quarter of 2025.

The drop in Japanese yields on Tuesday led to a weakening of the yen, which held its losses in early Wednesday trade, hovering around 144.30 per dollar.

Key figures at around 0230 GMT:

Tokyo - Nikkei 225: UP 0.5 percent at 37,918.86 (break)
Hong Kong - Hang Seng Index: UP 0.2 percent at 23,421.96
Shanghai - Composite: UP 0.2 percent at 3,346.13
Euro/dollar: DOWN at $1.1323 from $1.1329 on Tuesday
Pound/dollar: DOWN at $1.3502 from $1.3504
Dollar/yen: DOWN at 144.26 yen from 144.34 yen
Euro/pound: DOWN at 83.86 pence from 83.88 pence
West Texas Intermediate (WTI): UP 0.8 percent at $61.36 per barrel
Brent North Sea Crude: UP 0.7 percent at $64.56 per barrel
New York - Dow: UP 1.8 percent at 42,343.65 (close)
London - FTSE 100: UP 0.7 percent at 8,778.05 (close)

END/BUS/RH/