Asia-Pacific markets were mixed on Wednesday as investors braced for U.S. President Donald Trump to introduce fresh tariffs later this week. In Japan, the Nikkei 225 slipped 0.47% to its lowest point since September. Index heavyweight SoftBank fell 2.22%, and telecom company KDDI dropped 1.68%.
The Topix index also declined by 1.08%. South Korea saw its Kospi index drop 0.62% to close at 2,505.86, while the small-cap Kosdaq lost 0.95% to close at 684.85. Australia’s S&P/ASX 200 managed to rise 0.12% to close at 7,934.5.
Hong Kong’s Hang Seng Index traded flat at 23,205.15, and mainland China’s CSI 300 slipped 0.08% to end the trading day at 3,884.39.
U.S. stock futures saw slight declines as Wall Street awaited the expected rollout of Trump’s tariffs. In Tuesday’s trading, the S&P 500 added 0.38% to close at 5,633.07, while the Nasdaq Composite climbed 0.87% to 17,449.89. The Dow Jones Industrial Average marginally slipped by 11.80 points, settling at 41,989.96.
Shares of Japanese and Korean automakers were notably impacted. South Korea’s Kia Motors, which has a production facility in Mexico, slipped 0.75%. In Japan, Toyota and Honda each experienced minor declines of 0.74%.
Markets react to upcoming tariffs
Sumitomo Pharma led the losses among Japanese companies, down 4.4%. South Korea’s Financial Supervisory Service Governor Lee Bok-hyun has expressed his intention to resign amidst the market volatility.
South Korea’s inflation rate accelerated marginally in March to 2.1% year-on-year, higher than the 2% recorded in February and the economists’ expectations. India’s 10-year government bond yield fell to its lowest level in over three years. Anuj Tagra, vice president of Franklin Templeton’s India Fixed Income team, attributed the drop to foreign funds gaining confidence in rupee stability and India’s macro-economic outlook.
Brent crude prices have climbed back to around $74 amid growing geopolitical concerns. However, analysts from Fitch Solutions’ research unit BMI predict the rally will struggle to sustain due to broader macroeconomic uncertainties. Bank of Japan Governor Kazuo Ueda commented that U.S. tariffs could significantly impact global trade.
His remarks come as anticipation grows for Trump’s tariff declarations scheduled for April 2 and auto tariffs on April 3. Thailand’s semiconductor exports face the threat of 25% U.S. tariffs, a move that could potentially cost the country between $7 billion and $8 billion. The Thai baht weakened 0.2% to 34.22 against the dollar—the lowest since February 28.
UBS analysts suggest that while markets are likely to remain volatile in the near term, the news flow is expected to become more positive toward the second half of the year. They recommend that investors use market dips to build long-term exposure, particularly in U.S. equities and companies involved in artificial intelligence.
Photo by; Diego Gennaro on Unsplash
