Bonds Rise & Stocks Fall as Trump Tariffs Increase Risk – Asia Market Wrap

Global financial markets experienced a massive selloff when Trump’s attempt to reshape the world economic order proved more aggressive than anticipated.

US and European equity-index futures sank alongside the Dollar, while Asian markets plunged, with Japan’s index falling to its lowest level in nearly eight months. US 10-year Treasury yields fell to their lowest level in more than five months, as investors fled to safe havens, bolstering the Japanese Yen. Gold reached a record high. Global firms that rely on overseas supply chains, including Apple, Toyota, and Nike, have withdrawn.

The announcement of a minimum 10% tariff on all exports to the US, as well as extra charges on its largest trading partners, including China, Japan, and the European Union, has alarmed investors, who are concerned about how the levies will affect global economy. Two months into Trump’s administration, market exuberance has faded, with equities strategists lowering US stock projections and central bankers beginning to consider the potential impact on inflation.

Yields fell in Japan, Australia, and New Zealand, while bond futures rose in Europe and Canada. The turbulence rippled throughout the market, with the cost of insuring the region’s enterprises against default expected to rise by the most since 2023, according to a key indicator.