Trump’s Conflicting Levy Signals Upend Trading – Asia Market Wrap

Financial markets had a mixed reaction to Trump’s first day in office, with traders taking solace from the absence of immediate broad tariffs on all trade partners, but also voicing concern about potential future actions.

Chinese stocks led Asia’s rise after Trump first decided not to impose further tariffs on the country. At the same time, the Dollar strengthened as he announced plans to slap punitive tariffs of up to 25% on Canadian and Mexican imports as early as February 1st. Treasuries gained as the absence of larger new tariffs alleviated concerns about rising inflation.

The very little criticism on trade restrictions so far highlights the danger of increased volatility in financial markets as Trump begins his second four-year term. The whipsaw trading in Asia occurred after US stock futures climbed and the dollar plummeted Monday, when the president looked to be holding off on using executive orders to impose higher global tariffs.

The Yen pared its early gains but remained the sole Group of 10 currency to strengthen against the Dollar as markets braced for a potential BoJ interest-rate hike in a policy announcement anticipated Friday.

Oil dipped as traders processed Trump’s avalanche of pledges and executive actions, including plans to increase domestic output. Iron ore surged, but Bitcoin fell for the fourth straight day, trading below $102,000.