
Asian Equities Rose on Trump’s Tariff Reluctance – Asia Market Wrap
Asian equities climbed, with Chinese companies leading the way, following Trump’s statements indicating a potentially softer approach to tariffs on China. The yen rose after the Bank of Japan hiked interest rates.
After Trump remarked in an interview with Fox News that he would prefer not to employ tariffs against the world’s second-largest economy, a barometer of Chinese stocks in Hong Kong rose, while the dollar fell and the yuan strengthened.
Assets commonly viewed as proxies for China also responded, with the Australian dollar rising 0.5%. However, some experts urged caution in interpreting Trump’s remarks.
The Japanese yen rose against the dollar after the Bank of Japan hiked interest rates for the first time since July. The country’s two- and five-year government bond rates reached their highest levels since 2008, while 10-year JGB futures plummeted as much as 34 ticks to 140.59.
The central bank signaled that it sees a faster pace of inflation in the coming years compared with its previous forecast.
The BoJ also stated that if its forecasts are met, it will continue to hike the policy rate. The market will now be watching to see if BoJ Governor Kazuo Ueda gives any signals regarding the pace of future hikes at his press conference later today.