Tokyo (awp/afp) – Asian stock markets hesitated on Tuesday in volatile markets suspended by the inauguration of Donald Trump, after losing ground in the face of the announcement of an increase in United States customs duties with its neighbors — perspective which caused the Canadian dollar and the Mexican peso to unscrew.
Tokyo on the lookout, trade tensions worrying
On the Tokyo Stock Exchange, the flagship Nikkei index ended morning trading up a small 0.13% to 38,951.77 points, and the broader Topix index fell 0.07% to 2709.32. points. Around 03:00 GMT, the Seoul Stock Exchange lost 0.21%.
The Tokyo market had initially opened with clear progress: “Several media reported that the presidential decrees signed by Trump on the first day of his mandate should not include new customs tariffs”, which maintained the hope of a commercial approach more moderate than expected, explained Kosuke Oka, of broker Monex Securities.
But this respite was short-lived: Donald Trump, who had brandished the threat of massive customs taxes upon his return, said Monday that he intended to impose customs duties of 25% on products from Canada and Mexico as of February 1.
This announcement led the Tokyo Stock Exchange to abruptly reverse the trend and completely erase its gains, in a market worried about an intensification of trade tensions. The market was trying to stabilize around equilibrium at midday.
“Until the full picture of the content (of Trump’s announcements) becomes clearer, (…) the market could fluctuate considerably depending on the policies announced,” warn analysts at Tokai Tokyo Intelligence.
Greenback jumps, Canadian dollar and Mexican peso plunge
The strengthening of American customs duties would be likely to fuel inflationary tensions in the United States and therefore encourage the American Federal Reserve (Fed) to maintain high interest rates for longer – thus making the greenback more profitable .
Mr. Trump’s statements on customs duties targeting Canada and Mexico thus gave a momentary boost to the greenback on Tuesday.
Around 3:00 a.m., the greenback rose 0.27% against the common European currency, to 1.0387 dollars per euro. After a short-lived rebound, however, it lost 0.52% against the Japanese currency, at 154.81 yen per dollar.
The currencies of Canada and Mexico, which within two weeks could be the target of colossal customs barriers with their largest trading partner, fell together following Donald Trump’s announcements.
Around 03:00 GMT, the Mexican peso lost 0.78% against the dollar, while the Canadian dollar lost 0.64%, sliding to 1.4403 Canadian dollars per US dollar.
-Bitcoin was catching its breath after reaching a new record on Monday, driven by the prospect of deregulation of the cryptocurrency sector under Donald Trump’s second term. It fell 0.11% to 102,374 dollars.
Diving of Fuji TV, deserted by its advertisers
The Japanese group Fuji Media ended the morning down 2.71% in Tokyo.
Its Fuji TV channel is now boycotted by around fifty advertisers, including major brands like McDonald’s and Toyota, after allegations of sexual misconduct targeting a star presenter and accusations of a lack of transparency from the group on the matter.
Chinese stock markets torn, return with fanfare of an indebted real estate developer
Hong Kong resisted: around 03:00 GMT, the Hang Seng index gained 0.80% to 20,084.81 points, while mainland Chinese markets appeared weighed down by the prospect of new Sino-American customs standoffs.
The Shanghai composite index lost 0.32%, that of Shenzhen 0.47%.
The Chinese real estate giant Country Garden jumped 25% on the Hong Kong Stock Exchange where it was making its return, after nine months of suspension due to its serious financial difficulties. He said he was close to reaching an agreement with his creditors, and a Hong Kong judge’s ruling on him was delayed until May.
The prospect of abundant supply penalizes oil
Around 03:00 GMT, the barrel of Brent from the North Sea was almost stable (+0.01% to 80.16 dollars).
The prospect of an increase in the supply of black gold in the United States weighed on prices: Donald Trump announced that he would decree a national state of “energy emergency” and would reverse a number of climate measures, so notably to boost oil extraction.
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