Asia Opening Bell: Minor relief rebound in stock indices after Trump touted “big progress” in US-Japan trade talks

Global stock indices cratered yesterday, 16 April, led by technology and semiconductor stocks. Uncertainties over US tariffs and tic-for-tat trade retaliatory measures cast doubts on the technology sector's prior high earnings growth expectations.

On Wednesday, 16 April, US technology heavyweight Nasdaq 100 plummeted by 3%, and in total, considering its performance in the past four sessions, it had almost wiped-out half of the 12% daily gain seen on last Wednesday, 10 April when US President Trump announced a 90-day pause on the higher US reciprocal tariffs rates on all countries except China.

Europe-based ASML, the world’s biggest semiconductor chip-making equipment supplier, warned that US tariffs were increasing uncertainty around its earnings outlook for 2025 and 2026, which added “salt” to yesterday’s risk-off sentiment.

The US dollar continued to weaken, and safe-haven currencies, the Swiss franc and Japanese yen, outperformed among the major currencies with daily gains of 1.2% and 1% against the US dollar yesterday, 16 April.

Gold (XAU/USD) stood out positively as trade tensions rage on, and it soared by 3.5% to print a fresh all-time closing high of $3,343 yesterday. In today’s Asian opening session, it extended its gains by 0.2% to print a current intraday high of $3,357 at this time of writing.

Japan has concluded its first day of trade negotiations with US officials, where US President Trump made a surprise move to join in, and commented that there was “big progress” via his social media account.

Trump’s positive comments on the ongoing US-Japan trade talks have offered a possible minor relief to risk assets, as major Asian benchmark stock indices started today’s session with positive gains. Japan’s Nikkei 225 rallied by 0.7%, coupled with a Japanese yen losing 0.6% against the US dollar. Hong Kong’s Hang Seng Index ticked higher by 0.5%.

Risk sentiment in the latter half of the Asian session and early European hours will likely hinge on Q1 earnings results and the 2 PM Singapore time conference call from TSMC, the world’s largest contract semiconductor manufacturer.

The recent 8% rally seen on the AUD/USD from its intraday low of 0.5914 on 9 April to 16 April has started to show signs of bullish exhaustion below a key resistance zone defined by its former major ascending trendline support from the 13 October 2022 major swing low.

The hourly RSI momentum indicator has flashed out a bearish divergence condition at its overbought region, which suggests a potential pull-back to retrace some portions of the early up move.

Watch the 0.6390/6400 medium-term pivotal resistance on the AUD/USD, and a break below 0.6320 minor support may trigger a potential slide to expose the next intermediate supports at 0.6280/6250, and 0.6190/6170.

On the other hand, a clearance above 0.6400 invalidates the bearish tone for a further squeeze up towards the next intermediate resistances at 0.6470 (also the 200-day moving average), and 0.6520/6540.