Investing.com– Asian stocks were mixed on Tuesday, with Chinese stocks jumping on reports of a gradual increase in U.S. tariffs under Donald Trump, while sharp declines in Japanese stocks put pressure on other stocks regional.
Asian stocks had fallen sharply in the previous session as investors reassessed the likelihood of a U.S. interest rate cut following the release of stronger-than-expected jobs data last week.
U.S. stock index futures were higher in Asian trading on Tuesday. Market participants are now awaiting a key inflation figure due later this week to gauge the Federal Reserve’s interest rate outlook, after it took a hawkish stance at its latest meeting.
Chinese stocks soar following announcement of gradual increase in US tariffs
China’s index jumped 2%, 1.8% and Hong Kong’s 1.5%.
Members of President-elect Donald Trump’s new economic team are considering a plan to gradually raise tariffs each month, Bloomberg News reported Tuesday.
This approach, aimed at strengthening negotiating leverage while minimizing inflation risks, involves monthly tariff increases of 2 to 5 percent using executive powers under the International Emergency Economic Powers Act, says the report.
The proposal is in the preliminary stages and has not yet been presented to Trump, indicating that the concept is still under consideration.
Trump has pledged to impose tariffs of at least 60% on Chinese exports.
This week, the focus will be on several key economic indicators that will provide insight into China’s economic performance at the end of 2024. The country’s 2024 figures will be due on Friday. Additionally, December data and figures are also expected on Friday.
Japan’s Nikkei leads losses as markets reduce bets on a Fed rate cut
The Japanese index fell 1.7% on Tuesday after returning from vacation, while falling 1.3%.
Australia edged up 0.3%. Investors await December jobs data due Thursday.
That of South Korea remained largely unchanged amid a persistent political crisis in the country.
A Reuters survey showed the Bank of Korea is expected to cut its benchmark rate by 25 basis points on Thursday, a one-month advance, to support South Korea’s struggling economy amid heightened political uncertainty.
Elsewhere in Asia, the Philippines’ index fell 0.7%, while Singapore’s index edged lower.
for India, the opening was moderate on Tuesday.
Asian stocks face additional downward pressure due to prospects of smaller Fed rate cuts in 2025. The Fed cut rates by 100 basis points in 2024, but reported smaller cuts than expected in 2025 in the face of persistent inflation and a resilient economy.
According to the , markets now expect just one rate cut this year, a sharp adjustment from expectations of four cuts before the Fed’s December meeting.
