Stocks, dollar rebound in Asia as Trump steps back

Stock markets were enjoying a much-needed relief rally in Asia on Wednesday after US President Donald Trump said he had no plans to fire the head of the Federal Reserve, and hinted at lower tariffs for China.

The dollar jumped across the board after Trump walked back on threats to dismiss Fed Chair Jerome Powell, which had badly shaken investor confidence in US assets.

Trump also reiterated he wanted to do a deal with China where tariffs would not be anywhere near 145 per cent, but added that he would set the terms of a deal if Beijing did not enter talks.

Earlier on Tuesday, Treasury Secretary Scott Bessent had been reported saying he believes there will be a de-escalation in US-China trade tensions, but negotiations with Beijing have not yet started and would be a "slog".

"While it is still early days, the mood in the market is evidently shifting and what was a strong 'sell America' vibe flowing through markets yesterday has in part reversed," said Chris Weston, head of research at broker Pepperstone.

"Markets are becoming ever more conditioned to the President shooting from the hip and then reversing the stance like it was never a big issue."

Investors reacted by buying back into beaten-down stocks and Japan's Nikkei jumped 2.3 per cent in early trade, while South Korea's main index KS11 rose 1.2 per cent.

MSCI's broadest index of Asia-Pacific shares outside Japan added 0.3 per cent.

Wall Street extended an overnight bounce as S&P 500 futures climbed 1.8 per cent and Nasdaq futures 2.0 per cent. Sentiment had been helped by some upbeat earnings results, and even Tesla rebounded 5.0 per cent after the bell despite missing forecasts.

The dollar also recouped a little of its recent steep losses, rising 0.8 per cent on the Japanese yen to 142.72 and away from a seven-month low of 139.89.

The dollar rose 0.8 per cent on the Swiss franc to 0.8262, while the euro slipped 0.6 per cent to $US1.1348 ($A1.7803).

Longer-dated Treasuries rallied as Trump's reversal on Powell seemed to ease the threat to US monetary and fiscal credibility.

Investors have been worried that White House pressure to cut interest rates would risk fuelling inflation just as Trump's tariffs boost prices.

Yields on 30-year bonds fell 6 basis points to 4.812 per cent, while two-year yields rose 3 basis points to 3.83 per cent flattening the yield curve.

Fed fund futures ran into selling as investors scaled back the extent of rate cuts expected by year-end to around 81 basis points.

Tariffs are still seen dragging on the global economy as the International Monetary Fund on Tuesday slashed its forecasts for growth in the United States, China and most countries.

Still, the general improvement in risk sentiment helped oil prices recover some of their hefty losses.

Early Wednesday, Brent rose a further 67 cents to $US68.09 ($A106.82) a barrel, while US crude added 64 cents to $US64.31 ($A100.89) per barrel.

Safe-haven gold ran into profit-taking and slipped 0.8 per cent to $US3,353 ($A5,260) an ounce, off an all-time peak of $US3,500 ($A5,491).