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(Refiles to add dropped first name in paragraph 11)
By Hideyuki Sano
TOKYO, April 5 (Reuters) - Asian shares bounced from two-month lows on Thursday as world equities recovered from a selloff triggered by escalating Sino-U.S. trade tensions, with investors hoping a full-blown trade war between the world's two biggest economies can be averted.
Sentiment was lifted as the United States expressed willingness to negotiate a resolution to the trade fight after the proposed U.S. tariffs on $50 billion in Chinese goods prompted a quick response from Beijing that it would retaliate by targeting key American imports.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.2 percent, a day after it hit its lowest level in almost two month. Japan's Nikkei gained 1.2 percent.
Markets in mainland China, and those in Hong Kong and Taiwan, are closed on Thursday. On Wall Street on Wednesday, the S&P 500 gained 1.16 percent and the Nasdaq Composite added 1.45 percent, clawing back heavy losses of more than 1.5 percent right from earlier in the U.S. session.
"I think that the substance of trade restrictions and their real impact will be far less than the headlines," said Jeffery Becker, Chairman and CEO at Jennison Associates in New York. "U.S. and Chinese cross border trade has grown significantly over the last decade and economic inter-dependence runs very deep, deeper than the actual trade numbers. And both countries have a lot to lose by escalating trade war."
Many investors viewed U.S. President Donald Trump's latest tariffs plan as a part of his negotiation strategy, rather than his final policy.
Indeed, Trump's top economic adviser, Larry Kudlow, when asked whether the latest U.S. tariffs plan may never go into effect and may be a negotiating tactic, told reporters: "Yes, it's possible. It's part of the process." He called the announcements by the two countries mere opening proposals.
The trade actions will not be carried out immediately, giving the two countries room for manoeuvrer.
The proposed 25 percent U.S. tariffs on some 1,300 industrial technology, transport and medical products from China now see a public comment and consultation period that is expected to last around two months.
"Our view on the China-U.S. trade situation is that typically, the initial headline is worse than what we expect the implementation of ultimately turn out to be. So our expectation is it will remain tense situation but will not break out and to an all out trade war," said Mike Lillard, chief investment officer at PGIM Fixed Income in Newark, New Jersey.