Asian stocks mixed; Chinese stocks rise on report of gradual Trump tariffs By Investing.com
Investing.com– Asian stocks were mixed on Tuesday, with Chinese stocks higher on reports of a gradual increase in U.S. tariffs under Donald Trump, while sharp declines in Japanese stocks weighed on other regional shares.
Asian stocks fell sharply in the previous session as investors reassessed the likelihood of a US interest rate cut following stronger-than-expected wages data released last week.
U.S. stock index futures rose in Asian trade on Tuesday. Market participants are now awaiting a key inflation reading expected later this week to gauge the Federal Reserve’s interest rate outlook, after it took a hawkish stance at its last meeting.
Chinese stocks rose on news of a gradual increase in US tariffs
China’s index jumped 2% and the index climbed 1.8%, while Hong Kong’s index rose 1.5%.
Members of President-elect Donald Trump’s incoming economic team are considering a plan to gradually raise tariffs each month, Bloomberg News reported Tuesday.
This approach, aimed at increasing negotiating leverage while minimizing the risk of inflation, includes monthly tariff increases of 2% to 5% using executive powers under the International Emergency Economic Powers Act, the report said.
The proposal is in a preliminary stage and has not yet been presented to Trump, indicating that the concept is still under consideration.
Trump has promised to impose minimum tariffs of 60 percent on Chinese exports.
The focus this week will be on several key economic indicators that will provide insight into China’s economic performance at the end of 2024. Data for the full year 2024 is due to be released on Friday. Additionally, December data and figures are also expected on Friday.
Japan’s Nikkei leads losses as markets cut bets on a Fed rate cut
Japan’s index fell 1.7 percent on Tuesday after returning from vacation, while it fell 1.3 percent.
Australia rose by 0.3 percent. Investors are looking forward to December employment data to be released on Thursday.
South Korean has remained largely unchanged amid the country’s ongoing political crisis.
A Reuters poll showed the Bank of Korea is expected to cut its key interest rate by 25 basis points on Thursday, bringing the move forward by a month, to support South Korea’s struggling economy amid heightened political uncertainty.
Elsewhere in Asia, the Philippines index fell 0.7%, while the Singapore index fell.
a muted opening is indicated for India on Tuesday.
Asian stocks face further downward pressure on the prospect of a smaller Fed rate cut in 2025. The Fed cut rates by 100 basis points in 2024 but signaled fewer cuts than expected in 2025 amid sticky inflation and a resilient economy.
According to , markets now expect just one rate cut this year, a sharp adjustment from earlier expectations of four cuts ahead of the Fed’s December meeting.
