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Treasury Secretary Bessent to lead trade negotiations with

Japan

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Japan's Nikkei surges 6%, European shares open higher

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Crude oil rebounds from nearly four-year lows

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Dollar still weak

By Dhara Ranasinghe and Kevin Buckland

LONDON/TOKYO, April 8 (Reuters) - World markets won a

reprieve on Tuesday after three days of heavy selling that wiped

trillions of dollars off the value of shares, but the mood was

cautious with a focus on whether Washington might negotiate on

some of its aggressive tariffs.

Asia stocks bounced off 1-1/2 year lows,

European shares opened broadly higher and U.S. stock

futures pointed to a positive open for Wall Street where

shares fell to their lowest in over a year on Monday, before

steadying.

U.S. 10-year Treasury yields were steady after posting their

biggest one-day jump in a year on Monday and the dollar, which

has taken a beating from the tariff turmoil, remained weak

against other major currencies.

"The mood is a little brighter, at least if you are looking

at certain markets such as Japan which might be a priority for

trade deal but there is lots of uncertainty," said Chris

Scicluna, head of economic research at Daiwa Capital Markets in

London.

"Markets could continue to be extremely volatile."

Japan's blue-chip Nikkei stock index closed 6%

higher, with Treasury Secretary Scott Bessent tasked with

leading trade negotiations with Tokyo.

In Europe, shares rose from 14-month lows and markets in

London, Paris and Frankfurt were up more than 1% each, while oil

held above four-year lows hit on Monday.

"Importantly, a little ray of sunshine is starting to emerge

that gives hope that the U.S. is genuinely open to trade

negotiations, (with) the most significant being Japan with

Treasury Secretary Bessent," said Tapas Strickland, head of

market economics at National Australia Bank.

FRAGILE

But less than a week since U.S. President Donald Trump

unleashed sweeping reciprocal tariffs that sent world markets

into a tailspin, the mood remained fragile.

The VIX stocks volatility index, often referred to as

Wall Street's fear gauge, remained elevated at around 44 points

-- albeit off Monday's peak just above 60.

China's markets rose only modestly after the country's

sovereign wealth funds stepped in to buy shares.

Chip-export-dependent Taiwan's benchmark tumbled 5%, a

day after suffering its worst fall on record.

Thai stocks dropped nearly 6% in catch-up selling

from a holiday on Monday, while Indonesia returned from

a week-long holiday to 9% losses.

The Chinese yuan fell to 7.3677 per dollar in the

offshore market, the weakest in two months, before rebounding to

be slightly stronger than Monday's close at 7.3393.

The heightened uncertainty in markets wasn't helped by

shifting headlines on trade as investors looked for respite from

the sharp market volatility.

Trump also dug in his heels over China, vowing additional

50% levies if Beijing does not withdraw retaliatory tariffs on

the United States. Beijing said on Tuesday it will never accept

the "blackmail nature" of U.S. tariff threats.

The European Commission said on Monday it had offered a

"zero-for-zero" tariff deal to avert a trade war with the United

States as EU ministers agreed to prioritise negotiations, while

also striking back with 25% tariffs on some U.S. imports.

DOLLAR FRAIL

Safe havens the yen and the Swiss franc held near six-month

highs on Tuesday while the U.S. dollar nursed broad losses.

The dollar eased 0.5% to 147.08 yen.

The euro jumped 0.3% to $1.0943, and sterling

climbed 0.3% to $1.2757.

The 10-year Treasury yield was lower in London

trade after jumping some 17 bps on Monday as it bounced from

six-month lows.

Analysts said a number of reasons may have explained the

sharp rise in U.S. bond yields on Monday including investors

selling their most liquid assets to make up for falls elsewhere.

On Tuesday, Japanese government bond yields rose off their

own multi-month lows, with the 10-year yield up

as much as 13 bps to 1.24%.

Gold added 0.8% to $3,006 per ounce, although it was

still well back from last Thursday's record peak at $3,167.57,

reached in the immediate aftermath of Trump's "Liberation Day"

tariff announcement.

Brent crude futures slipped 0.7% at $63.71 per

barrel, and U.S. West Texas Intermediate crude futures

dipped 0.6% to $60.33.

Cryptocurrency bitcoin rose 1.2% to trade just below

$80,000, after bouncing off a five-month low of $74,445.79

reached on Monday.