Shares in the region gained at the open along with US equity-index futures early Monday as Trump paused some tech levies, though he indicated a specific tariff will be announced in due course. Treasury opened steady while the dollar slipped against most major currencies.
The pause on duties on goods from smartphones to laptop computers and memory chips offers an interim reprieve for markets ravaged by Trump’s fast-evolving trade policy. Volatility shows little signs of easing after the president signaled separate duties on consumer electronics and microchips are being planned as he tries to rewrite global trade rules that he says aren’t in favor of the US.
“The amount of conflicting statements and policy-on-the run makes it impossible to trade short term,” said Matthew Haupt, a portfolio manager at Wilson Asset Management in Sydney. “The market is trying to look through the noise and assuming we will end up in a negotiated end game that is more favorable than current terms.”
The slight improvement to sentiment in Asia comes after the S&P 500 jumped 1.8% on Friday following a report that a Federal Reserve official said the central bank is ready to help stabilize markets, if needed. Still, US Treasury yields climbed Friday, with benchmark 10-year bonds capping their biggest weekly jump since 2001 as investors pulled back from US assets that are normally seen as a haven from financial turmoil.
Asian stocks slumped for a third week last week after Trump rapidly escalated his trade war with China while announcing he would delay his so-called reciprocal tariffs that adversely impacted the region. A pause in duties on consumer electronics indicates a willingness by Trump to compromise on a deal, according to some analysts.“Unfortunately, however, trade policy uncertainty continues to metastasize, creating issues not just for markets but also for foreign trading partners trying to cut deals in the next ninety days,” said Sarah Bianchi, a strategist at Evercore ISI, in a note Sunday.Shares of technology companies including Sony Group Corp. and Samsung Electronics Co. jumped following Trump’s reprieve.
China’s government said the US decision to exempt certain consumer electronics from its so-called reciprocal tariffs is a small step toward rectifying its wrongdoings and urged Washington to do more to revoke the levies. Chinese shares rose last week as expectations for stronger stimulus and hopes of an eventual deal outweighed concerns over a further escalation of trade tensions.
Japan at the weekend said it wasn’t planning to use its US Treasury holdings as a negotiating tool to counter US tariffs. Some investors speculated that global reserve managers including China could be re-evaluating their positions in US government debt given the impact of Trump’s trade policies.
