Stock markets in Asia reacted calmly to a new turn in the implementation of tariffs by US President Donald Trump on Tuesday, while the dollar maintained its growth and oil prices fell. This was reported by Reuters, writes UNN.
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Stocks on Wall Street fell after Trump sent letters to 14 countries, including Japan and South Korea, announcing a sharp increase in tariffs on imports to the US, while postponing their entry into force until August 1.
Japan's Nikkei index opened lower but later moved into positive territory after Trump called the deadline "firm but not 100%," noting that tariffs could be changed for individual countries. The Australian dollar rose ahead of the Reserve Bank of Australia's decision, which was expected later in the day.
Market reaction to the tariff announcements was subdued due to memories of Trump's swift withdrawal of "Liberation Day" tariffs, which were initially announced on April 2, noted Tapas Strickland, head of market economics at National Australia Bank.
We will see a lot of volatility as new headlines emerge, as new letters emerge, and as negotiations come to the forefront ahead of the August 1 deadline.
In April, Trump capped all so-called "mirror tariffs" for trading partners at 10% until July 9 to allow time for negotiations. As of now, only two agreements have been reached — with the UK and Vietnam. In June, Washington and Beijing agreed on a framework agreement on tariff rates, restoring a fragile truce in their trade war.
Tariffs on imports from Japan and South Korea are set to rise to 25% from August 1. Japanese Prime Minister Shigeru Ishiba called the increase "deeply regrettable" and said his country would continue negotiations with the US.
The European Union will not receive a letter with new increased tariffs, EU sources told Reuters on Monday. The EU still hopes to conclude a trade agreement by Wednesday after European Commission President Ursula von der Leyen and Trump had a "good conversation," according to an EC representative.
The broad MSCI Asia-Pacific ex-Japan index rose 0.2% in early trading. Japan's Nikkei index rose 0.4%, and South Korea's KOSPI jumped 1.5%.
The dollar rose 0.2% to 146.36 yen, reaching a two-week high. The euro remained stable at $1.1741. The Australian dollar rose 0.4% to $0.6516 ahead of the central bank meeting, where the vast majority of analysts expect a 25 basis point rate cut.
The price of US oil fell 0.5% to $67.59 per barrel after an almost 2% rise on Monday. Spot gold fell 0.2%.
In early trading, Euro Stoxx 50 futures fell 0.1%, German DAX futures fell 0.1% (to 24,133 points), and British FTSE futures fell 0.3%.