Asian Markets Were Mixed Amid US Tariff Improvements and Monetary Policy Doubts

 

Asian markets showed mixed performance on Tuesday (Jan. 14). On the one hand, Chinese markets surged on reports of a moderate US tariff hike under President-elect Donald Trump. On the other hand, Japan's shares declined sharply after returning from a holiday. Investors traded cautiously before the US released inflation data, further dampening the sentiment.

 

China's markets outperformed. The mainland's Shanghai Composite Index climbed 2.54%; Hong Kong’s Hang Seng Index added 1.83%. The increase resulted from optimism fueled by a report that Trump’s economic team would increase tariffs on Chinese imports incrementally. Such a gradual approach, including monthly tariff increases of 2 to 5%, would enhance the bargaining chip and minimize inflation risks. Investors focused on China's GDP, industrial production, and retail sales data, which are due on Friday, for further economic clarity.

 

Japan's market underperformed, with the Nikkei 225 slumping 1.83%. Losses were driven by a hawkish interest rate policy outlook after stronger-than-expected payroll data last week.

 

South Korea’s KOSPI closed up 0.31%. A Reuters poll indicated the Bank of Korea might cut its base rate by 25 basis points on Thursday to support its fragile economy amid ongoing political turmoil.

 

Elsewhere, as of 4:22 pm SGT., Singapore's Straits Times Index dipped 0.14%. FTSE Malaysia KLCI fell 0.13%. As of 4:37 pm SGT., India’s Nifty 50 index rose 0.30% following a flat open.