|Asian markets rally on hopes Trump will temper tariffs threat|
The tycoon sparked fears of a global trade war last week when he unveiled plans to slap levies on imports of steel and aluminium.
The news sent markets into a tailspin from Sydney to New York, with investors already on edge at the prospect of rising interest rates and the end of crisis-era central bank stimulus measures.
However, after another down day in Asia Monday, investors in New York rushed back as they bet that Trump would not push through with extreme protectionist policies.
"Given the overwhelmingly negative response from industry leaders, international financial markets and even the furious backlash from loyal members of Trump's administration, there is growing optimism that perhaps significant exemptions will be forthcoming," said Stephen Innes, head of Asia-Pacific trade at OANDA.
"Investors remain guardedly optimistic."
However, he warned that "expecting for cooler heads to prevail might be far too optimistic given that President Trump promoted reforms of US trade policies as a cornerstone of his election campaign, and it's challenging to envision him backing down."
Trump campaigned on a protectionist "America First" platform, promising to pull out of global trade deals which he said were hurting US workers.
All three main indexes on Wall Street rose between one and 1.4 per cent on Monday and those gains filtered through to Asia on Tuesday.
Tokyo ended 1.8 per cent higher, with Kobe Steel up slightly ahead of a news conference in which its CEO Hiroya Kawasaki resigned following publication of a report by the firm that found staff - including executives - changed or falsified inspection data before shipping products.
Hong Kong jumped more than two per cent, while Sydney, Seoul, Singapore and Taipei were all more than one per cent higher. Shanghai reversed early losses to close one per cent higher.
In early European trade London rose 0.8 per cent, Paris added 0.7 per cent and Frankfurt put on 1.2 per cent.
Attention will now turn to the release on Friday of US jobs and wage growth data, which will give a fresh idea of the state of the world's top economy.
Fears that rising wages would fuel inflation and push up interest rates have spooked investors since the start of February.
Tuesday's more upbeat tone helped the dollar against the yen, which had rallied on its safe-haven status. But the US unit slipped against the pound and euro.
The greenback also declined against high-yielding currencies, with the Australian dollar, Korean won and South African rand among the main winners.
Crude prices extended Monday's gains on reports of easing US stockpiles and news of a halt at an oilfield in Libya.
Prices were also boosted by bullish comments from top energy producers meeting this week at an annual energy gathering in Houston, analysts said.
"Oil prices were 'talked up' from the sidelines of the CERAWeek Energy conference by OPEC," said Sukrit Vijayakar of Trifecta Consultants.
Officials at the conference are widely expected to address a global supply glut, with surging US shale production threatening to derail efforts by OPEC and Russia to stabilise prices by capping output.
Tokyo - Nikkei 225: UP 1.8 per cent at 21,417.76 (close)
Hong Kong - Hang Seng: UP 2.1 per cent at 30,510.73 (close)
Shanghai - Composite: UP 1.0 per cent at 3,289.64 (close)
London - FTSE 100: UP 0.8 per cent at 7,172.71
Euro/dollar: UP at US$1.2350 from US$1.2335 at 2200 GMT
Pound/dollar: UP at US$1.3848 from US$1.3844
Dollar/yen: UP at ¥106.20 from ¥106.18
Oil - West Texas Intermediate: UP 10 cents at US$62.67 per barrel
Oil - Brent North Sea: UP 12 cents at US$65.66
New York - Dow: UP 1.4 per cent at 24,874.76 (close)