Asian stocks nervous over mixed signals on Trump tariffs By Investing.com

Investing.com– Asian stocks were mixed in volatile trading Tuesday after U.S. President Donald Trump failed to impose high tariffs on China on his first day in office, as feared, although that he still mentioned the possibility of future customs duties.

Risk assets saw increased volatility as investors remained largely uneasy about Trump’s policies. The US president signed a series of executive orders on his first day in office, from executive orders to increase US oil production to delaying a ban on social media app TikTok.

U.S. stock index futures were slightly positive in Asian trading, but also saw increased volatility as Trump announced plans to impose tariffs on China, Mexico and Canada.

Asian stocks had a tepid start to 2025, although they gained ground in recent sessions on hopes that Trump’s tariffs would not be as tough as initially feared. Uncertainty over tariffs remained in play, keeping investors on the sidelines.

China’s indexes fell slightly, while Hong Kong’s index rose 0.8%.

Australia’s rose 0.6%, while Singapore’s fell 0.6%.

South Korea’s fell 0.3%, while India’s showed a negative opening.

Trump doesn’t sign tariffs on day one, but considers more tariffs

Trump did not impose any trade tariffs on China, Mexico and Canada – three countries that had been the subject of his ire in recent months – on the first day of his presidency.

But Trump has indicated he is reevaluating U.S. trade, including imposing 25% tariffs on imports from Canada and Mexico.

Trump also signed an order calling for an “America First” trade policy, directing federal agencies to examine other countries’ unfair trade practices while reviewing existing trade agreements.

Trump’s orders led to bets that he was still on track to impose higher tariffs against major economies, particularly China. This came even as Trump engaged in positive dialogue with his Chinese counterpart Xi Jinping last week.

Raising tariffs risks disrupting global trade and could also lead to retaliatory measures from major economies, triggering a new global trade war between the United States and other major economies.

But in Asia, China is expected to deploy even more stimulus measures in the face of the US trade war, which could boost local growth.

Japanese stocks muted as BoJ looms

The Japanese indices and those of Japan moved little on Tuesday, with investors turning even more cautiously towards this country before the end of the week.

The BoJ is potentially expected to raise interest rates further this week, especially as policymakers have raised the possibility of such a move in recent comments.

While higher rates signal more pressure on Japanese markets, they also reflect increased confidence from the BoJ in the Japanese economy, which could make sectors exposed to the domestic market more attractive.

But the yen’s strength, amid recent speculation about rate hikes, is expected to put pressure on export-oriented sectors.