Asian markets presented a mixed picture on Friday, amidst holiday-thinned trading, as investors closely monitored countries' tariff negotiations with the United States. Supporting the markets to some extent were remarks by Donald Trump indicating his reluctance to further escalate levies on Beijing.

Governments worldwide are actively engaging with the US presidential team, seeking to alleviate the substantial tariffs imposed by the United States. These tariffs, according to Trump, are a response to years of being "ripped off," and are aimed at encouraging the reshoring of manufacturing. Among the various officials who have been in contact, Japanese negotiator Ryosei Akazawa's visit this week was particularly significant, given the long-standing relationship between the two countries. Akazawa met with Trump, Trade Representative Jamieson Greer, and Treasury Secretary Scott Bessent on Wednesday, but no immediate progress was made. However, a second round of talks is scheduled for the end of April. Prior to the meeting, Trump had expressed optimism about "big progress" in the negotiations.

Hopes that most of the measures against US trading partners could be rolled back have eased some market anxiety following the turbulence at the beginning of the month. However, investors remain cautious due to the president's unpredictable nature. Trump offered some encouragement on Thursday, stating his reluctance to continue raising rates on China, as this could potentially halt trade between the two economic superpowers. He added that Beijing had reached out to him.

"I have a very good relationship with President Xi (Jinping), and I think it’s going to continue," he said. "And I would say they have reached out a number of times."

These remarks followed a Bloomberg report suggesting that China might be open to dialogue, but wanted to see certain measures taken beforehand, including a moderation of anti-Beijing comments from some cabinet members. Despite this, Washington announced new port fees on Chinese-built and operated ships on Thursday, with the aim of boosting its domestic shipbuilding industry and curbing China's dominance in the sector. This move stems from a probe initiated under Joe Biden's administration, but it could potentially escalate tensions further.

Following a mixed lead from Wall Street, Asian markets experienced fluctuations. Tokyo led the gains, despite data revealing that Japanese inflation accelerated last month due to a more than doubling of rice prices. Seoul and Taipei also saw increases, while Shanghai experienced a dip. Hong Kong, Sydney, Singapore, Mumbai, Jakarta, Wellington, and Manila were closed for holidays.

Investors are also closely monitoring developments at the Federal Reserve, particularly in light of Trump's criticism of Fed boss Jerome Powell, who warned that the sweeping tariffs were "highly likely to generate at least a temporary rise in inflation". The president criticized Powell for not lowering interest rates, as the ECB has done, and stated that his "termination cannot come fast enough". Speaking to reporters at the White House, he said Powell would "leave if I ask him to", adding "I'm not happy with him. I let him know it and if I want him out, he'll be out of there real fast, believe me". Earlier, in a post on Truth Social, he said his "termination... cannot come fast enough".

Michael Hewson at MCH Market Insights noted that US inflation was significantly higher than the Fed's two percent target, and that the tariff policy had created "significant ripples in the US economy, prompting a collapse in consumer confidence in the process".

"Trump is amping up the pressure on the Fed to cut rates quickly," he wrote in a note. "Sadly, for Trump his very policies are the ones causing the Fed to pause, with Powell warning that the sheer size of the tariffs is complicating the central bank’s job. The chaos being unleashed by the US administration is also giving business cause for concern."

Key figures at 0230 GMT: