Investing.com– Asian stocks rose on Tuesday, recovering a measure of recent losses as investors awaited more cues on a potential trade war between China and the West, while upcoming inflation prints were also in focus.

Chinese markets stabilized after three days of steep losses as Chinese and European ministers opened dialogue over import tariffs on Chinese electric vehicles. But sentiment towards the country still remained fragile.

Regional markets took middling cues from Wall Street, which ended largely lower on losses in heavyweight chipmaking stocks. U.S. futures traded sideways in Asian trade.

Focus this week was largely on upcoming data, which is the Federal Reserve’s preferred inflation gauge, and is likely to factor into the outlook for U.S. interest rates. 

Anticipation of the inflation print kept broader Asian markets subdued, while weakness in technology shares also limited overall gains. 

Chinese markets steady, trade tensions in focus 

China’s and indexes rose 0.1% each, while Hong Kong’s index surged nearly 1%. All three indexes had logged steep losses in recent sessions, after Chinese officials warned of a trade war with the EU over new import duties on Chinese EVs.

Chinese ministers were seen engaging in dialogue with German officials over potentially reducing or even lifting the tariffs, which are set to be imposed from July. 

But Canada joined the U.S. and the EU in imposing more tariffs on Chinese EVs, a move that could further sour already strained relations between China and the West. 

Concerns over China have been a key weight on sentiment towards Asia in recent sessions, especially if the country escalates trade tensions with other major economies.

Sentiment towards China was also dented by a Reuters report, which said that the Biden Administration was investigating major Chinese telecom firms over potential security concerns.

More inflation cues awaited

Japan’s index rose 0.5%, although losses in heavyweight tech stocks kept the index trading largely rangebound. 

But the broader index surged 1.4%, boosted by a rebound in economically sensitive stocks.

Focus this week was on upcoming inflation data from Tokyo, which is due this Friday. The reading comes after the minutes of the Bank of Japan’s latest meeting showed some members speculating over an interest rate hike in July.

Weakness in the , which could attract government intervention, also kept sentiment towards Japan on edge.

Among other Asian markets, Australia’s rose 0.9%, boosted by mining stocks on stronger commodity prices. Focus was also on an upcoming from the country, due on Wednesday.

A private survey showed Australian improved slightly in June. 

South Korea’s added 0.4%, with bigger gains being held back by losses in technology stocks.

Futures for India’s index pointed to a flat open, as the index continued to face resistance near recent record highs.