Asian shares track Wall Street gains, bonds steady

Asian shares gained at the open, tracking the biggest rally on Wall Street in more than two weeks, as sentiment was boosted by a rebound in US consumer confidence and a global surge in bonds.

A regional stock gauge rose 0.4% led by shares in Japan, which jumped more than 1%. Yields on the 30-year Treasury were steady after posting their biggest one-day slide since late March, on signs that Japan may adjust debt sales following a market rout. The dollar edged down, while the yen strengthened.

Investors are awaiting Nvidia Corp. earnings and a key 40-year government bond auction in Japan Wednesday to see if the momentum can be sustained. Tuesday’s rebound broke a ‘Sell America’ trend in the markets that was most visible in the dollar after President Donald Trump unleashed his tariff war and pushed for tax cuts, which raised concerns about US fiscal deficit.

“There is a little bit more optimism. It’s certainly a calmer market,” Tony Rodriguez, Nuveen’s head of fixed income strategy, said on Bloomberg TV. Still, “we’re settling into a range that feels very tenuous because there’s so much uncertainty.”

Browbeaten long-bond investors got some relief on Tuesday as a global debt rally sent benchmark yields tumbling. Solid demand for a $69 billion sale of two-year Treasuries added to the advance in the US.

Concerns on the ability of governments to cover massive budget deficits weighed on developed-market debt in recent days, pushing long-dated US yields toward levels last seen in 2007.

In Japan, investors will be focused on the key bond sale on Wednesday. The Ministry of Finance’s debt sale is coming at a time when long-term borrowing costs have also surged in other major economies, including the US. Japan’s yields, particularly in the super-long sector, have been on the rise as the Bank of Japan scales back its bond purchases, while life insurers are failing to fill in that gap.

In Asian company earnings, Xiaomi Corp. reported better-than-expected revenue in the March quarter as it moves to aggressively expand its presence in China’s EV market and grow its core smartphone business.

Shares of Temu owner PDD Holdings Inc. plunged in US trading after its quarterly sales and profit missed estimates, underscoring how trade tensions between Beijing and Washington are taking a toll on its business.

Meanwhile, US consumer confidence rebounded sharply in May from a near five-year low as the outlook for the economy and labor market improved amid a truce on tariffs.

Despite widespread apprehension among consumers and companies alike, the economy at large and the job market in particular have held up fairly well. Tariffs will probably take months to make their way through the economy, forecasters say, and consumers have so far been shielded from the brunt of the impact by retailers absorbing much of the higher costs.

“The book is far from closed on tariffs, as we saw over the past few days with the threat of 50% tariffs for the EU, but financial markets seem ready to move past it, and these numbers suggest that households may be moving in that direction as well,” Stephen Stanley, chief economist at Santander US Capital Markets, said in a note.

Elsewhere, the US government is poised to receive a so-called golden share in United States Steel Corp. as a condition for approving Nippon Steel Corp.’s proposed acquisition of the American company, according to people familiar with the matter.

Also Read: Trade Setup for May 28: Nifty aims for a rebound from lower levels after minor pullback