MSCI’s world equity index, which tracks shares in 47 countries, turned positive on the day, having earlier hit its lowest level since February 9, after a Wall Street Journal report that Treasury Secretary Mnuchin was considering a visit to Beijing to begin negotiations.

U.S. stock futures meanwhile rose more than 1 percent on the news.

“Exemptions on steel/aluminum tariffs have already been granted for other important trade partners (Canada, Mexico, EU), which suggests the U.S. president is using this approach more for negotiating leverage rather than any real intention to start a global trade war”, wrote Mike van Dulken, head of research at Accendo Markets, noting a “measured” and “nuanced” response from China so far.

Most European stock indices opened slightly higher, with the STOXX 600 benchmark up 0.4 percent and the export-sensitive German DAX up 0.5 percent.

Japan’s Nikkei meanwhile erased earlier losses of 1.3 percent to end 0.7 percent higher.

Fears of a trade war mounted earlier this month after Trump first slapped tariffs on steel and aluminum imports, and then on Thursday specifically targeted China by announcing plans for tariffs on up to $60 billion of Chinese goods.

Signs of potential compromises were also supported by news overnight that South Korea would be exempted from U.S. steel tariffs in a revision of the bilateral trade pact between the two countries.

South Korea’s benchmark share index rose 0.8 percent.

The dollar also bounced off a 16-month low against the Japanese yen, but remained close to a one-month low against a basket of currencies, suggesting that fears have not receded completely.

Reuters