Australian shares rose on Tuesday's close, as Asian markets rebounded from tariff losses, boosted by Japan-US Trade optimism.

The S&P/ASX 200 Index rose 2.27% or 166.7 points to close at 7,510.

President Donald Trump appointed two cabinet members to start trade talks with Japan, suggesting the country may be prioritized in tariff reduction discussions over other US trade partners.

Meanwhile, the President also threatened to impose an extra 50% import tax on China, which the country pledged to retaliate.

"It's too early to say that we have turned the corner, particularly with Trump still floating the idea of additional tariffs on China," said Tim Waterer, chief market analyst at KCM Trade.

On the domestic front, business conditions were little changed in March, and confidence remained in the negative territory, while the road ahead is paved with uncertainties amid recent developments in global trade, according to a survey by National Australia Bank.

Consumer sentiment declined to a six-month low in April in signs of "deepening unease" in the wake of US tariffs, according to a survey by Westpac and Melbourne Institute.

The Treasury and the Department of Finance of Australia maintained the country's growth projections but warned that risks have escalated in the wake of the US tariffs, according to a pre-election economic and fiscal outlook report.

In company news, Guzman y Gomez (ASX:GYG) reported fiscal third-quarter network sales of AU$289.5 million, up from AU$234.2 million a year earlier. Shares rose past 4% at market close.

Cochlear (ASX:COH) will continue to operate under a duty-free arrangement with the US as it awaits clarity on recent trade developments, the maker of hearing implants said.

Lastly, James Hardie Industries (ASX:JHX) shareholders urged the Australian Federal Government to review the Australian Securities Exchange's decision to grant a waiver that prevented James Hardie investors from voting on the proposed merger with US outdoor building products maker Azek. Its shares fell 3% on market close.