Asia-Pacific Markets Rebound Following Previous Losses Amid Trade Tensions

Asian stock markets experienced a significant rebound on Tuesday after sharp losses in the previous session triggered by concerns over U.S. President Donald Trump’s trade policies. Markets in Japan, Australia, and Hong Kong led the recovery, with Japan’s Nikkei 225 surging over 6%. The Hong Kong stock market, which suffered a massive loss on Monday, saw a partial recovery, with the Hang Seng Index climbing 1.51%. Investors were reacting to renewed tensions stemming from Trump’s threats of escalating tariffs on China, which had caused widespread panic in the previous session.

Despite the rebound in several markets, other parts of Asia faced continued struggles. Indonesia’s Jakarta Composite Index plunged by over 7% after trading resumed following a circuit breaker, and Vietnam’s market fell by 6.48%. On the other hand, countries like Japan, South Korea, and Australia showed strong gains, partly fueled by oversold conditions and renewed optimism for a potential market recovery. Analysts suggested that while some markets were showing signs of stabilization, others, particularly in China and Hong Kong, may face longer-term volatility due to ongoing trade concerns.

U.S. President Trump’s decision to impose additional tariffs on China and his comments on global trade policy remained central to market sentiment. Trump’s strategy of protectionist tariffs has reignited fears of a global economic slowdown, dampening investor confidence worldwide. The threat of further tariffs, especially a 50% increase on Chinese imports, continues to escalate tensions between the two economic giants. As a result, markets in Asia are experiencing uncertainty and volatility, reflecting broader concerns about the potential consequences of prolonged trade conflicts.

In other developments, Singapore’s Prime Minister Lawrence Wong expressed concerns over the potential “disastrous” effects of worsening trade disputes and emphasized the importance of global cooperation. Meanwhile, the Chinese yuan depreciated to its weakest level since late 2023, exacerbating fears of an economic slowdown. Market watchers caution that while some regions may see a temporary recovery, much depends on the trajectory of U.S.-China trade negotiations and potential shifts in global monetary policy.

Source: cnbc