On the Tokyo Stock Exchange, the flagship Nikkei index closed up 0.32% to 39,027.98 points, and the broader Topix index in near balance (+0.08% to 2713.50 points) .
The Asian stock markets, suspended from the inauguration of Donald Trump, moved up and down on Tuesday, notably weighed down by the announcement of an increase in United States customs duties with its neighbors – a prospect which also caused people to unscrew Mexican peso and Canadian dollar.
On the Tokyo Stock Exchange, the flagship Nikkei index closed up 0.32% to 39,027.98 points, and the broader Topix index in near balance (+0.08% to 2713.50 points) . Sydney gained 0.66% and Seoul lost 0.08%.
Everywhere, the session experienced a roller coaster, suspended from the inauguration of Donald Trump.
The Tokyo market had initially opened in clear progress: press reports had reported that the decrees signed on the first day of Mr. Trump’s mandate would not include new customs tariffs, reviving hopes of a more moderate trade approach than ‘expected.
But this respite was short-lived: Donald Trump said on Monday that he intended to impose customs duties of 25% on products from Canada and Mexico as of February 1.
This announcement “brutally” caused the stock markets to stumble, with “a wave of sales (of securities) for fear of risk”, observed the experts at IwaiCosmo. Tokyo then tried to recover somewhat.
“Customs duties are postponed but not forgotten. However, it seems that Canada and Mexico will be targeted, but that the hope of negotiations persists for China,” enough to maintain investor morale a little, noted Charu Chanana of Saxo Markets.
The automobile under pressure
Automakers whose production lines include factories in Mexico have suffered, seeing their early trading gains collapse and even sink into the red.
In Tokyo, Toyota ended up slightly (+0.19%) and Honda down 0.26%: Honda sends most of its Mexican production to the United States. Mazda Motor dropped 2%.
South Korean automobile battery manufacturers plunged together, like LG Energy Solution (-4.45%) and Samsung SDI (-3.90%).
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 thus gave a sudden boost to the dollar: around 06:30 GMT, the greenback rose by 0.35% against the common European currency, to 1.0379 dollars per euro. After a short-lived rebound, however, it lost 0.14% against the Japanese currency, at 155.40 yen per dollar.
The currencies of Canada and Mexico, which could be the target of colossal customs barriers within two weeks, have plummeted.
Around 06:30 GMT, the Mexican peso lost 1.42% against the dollar, while the Canadian currency lost 0.90%, sliding to 1.4439 Canadian dollars per US dollar, the lowest in five years.
Bitcoin was catching its breath after reaching a new record on Monday, driven by the prospect of deregulation of the cryptocurrency sector by Donald Trump. It fell 0.80% to 101,708 dollars.
Chinese stock markets are torn
Hong Kong resisted: around 06:30 GMT, the Hang Seng index gained 0.91% to 20,106.53 points, in a market relieved that Donald Trump did not attack China upon his arrival with immediate customs taxes .
Conversely, he suspended for 75 days the application of the law banning the social network TikTok in the United States.
A gesture of goodwill which only partially reassured the markets of mainland China, haunted by the prospect of customs standoffs: the Shanghai composite index lost 0.26%, that of Shenzhen 0.02%.
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.
Oil penalized
The oil market continued to plunge: around 06:30 GMT, a barrel of American WTI fell by 0.82% to $77.24, and that of Brent from the North Sea by 0.27% to $79.93.
The prospect of an increase in the supply of black gold in the United States weighed on prices. Donald Trump announced that he would declare a national state of “energy emergency” and would reverse a number of climate measures, in particular to boost oil extraction.
