TOKYO (News Wires) - Asian stocks rose across the board on Wednesday as expectations that Beijing would implement stimulus to soften the economic blow from the Sino-US trade war helped Chinese shares rally. Spreadbetters expected European stocks to follow Asia's lead and open higher, with Britain's FTSE rising 0.15 per cent, Germany's DAX adding 0.2 per cent and France's CAC gaining 0.2 per cent. MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.95 per cent. Global equities have been on a steady footing this week as investors looked past the latest escalation in the US-China trade feud, seen by some market participants as less severe than expected. Hong Kong's Hang Seng was up 1.3 per cent and the Shanghai Composite Index rose more than 1 per cent following a surge of 1.8 per cent the previous day. Economists at Bank of America Merrill Lynch wrote China was likely to step up policy easing as a buffer against the negative effects of higher tariffs. "In our view, both monetary and fiscal easing will likely be rolled out to boost domestic demand and stabilise financial market sentiment," they said. Australian stocks added 0.5 per cent, South Korea's KOSPI was little changed and Japan's Nikkei rose 1.3 per cent. The Trump administration said on Monday it will implement new tariffs of 10 per cent on $200 billion of Chinese products on Sept. 24, with the tariffs to go up to 25 per cent by the end of 2018. China hit back, saying it will levy tariffs on about $60 billion worth of US goods, as previously planned, but cut the tariff rates. "There was relief as the United States set the initial tariffs at 10 per cent, rather than the expected 25 per cent, seen by some as a gesture that it was buying time for further negotiations," said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management in Tokyo. While global market reaction to the latest phase of the trade dispute has been relatively limited, the US-China row was expected to heat up - a major worry for investors. "In reaction to China's latest retaliatory move, Trump is now highly likely to hit back by adding tariffs to another $267 billion of Chinese goods. The trade war will only escalate," said Yoshimasa Maruyama, chief market economist at SMBC Nikko Securities in Tokyo. "It remains to be seen if China holds back its anger and still holds negotiations with the United States. But if it opts not to, we'll have to brace for the trade conflict dragging on into 2019." US Treasury Secretary Steven Mnuchin last week invited top Chinese officials to a new round of talks, but speculation has risen that Beijing would decline to attend after Washington fired its latest trade salvo. China's yuan was up 0.15 per cent at 6.8504 per dollar in onshore trade, supported by comments from Premier Li Keqiang that Beijing would not weaken its currency to boost exports. The Australian dollar, seen as a gauge of risk sentiment, stretched its overnight rally and rose to a near three-week peak of $0.7255. Safe-haven US Treasuries were sold and their yields rose on the back of improved investor risk appetite. The benchmark 10-year Treasury yield stood at 3.049 per cent after touching 3.059 per cent overnight, its highest since May 23. The rise in yields in turn propped up the dollar, which climbed to a two-month high of 112.43 yen. The yen showed little reaction to the Bank of Japan's well-anticipated decision on Wednesday to keep monetary policy steady. The BoJ also maintained its 10-year Japanese government bond yield target at around zero per cent.
