Asian markets were mixed on Wednesday as traders assessed the fallout of former U.S. President Donald Trump’s proposed tariffs and looked ahead to key economic data and policy decisions. The New Zealand dollar surged after the nation’s central bank hinted at a slower pace of monetary easing, contrasting the broad caution gripping global markets.
The MSCI Asia Pacific Index saw a marginal decline of less than 0.1%, reflecting a mixed trading session. Japan’s Topix index slid 0.6%, driven by declines in industrial and technology shares, while Hong Kong’s Hang Seng Index rose modestly by 0.1%. Australian equities outperformed, with the S&P/ASX 200 Index gaining 0.4%, supported by strength in mining and financial sectors. The Shanghai Composite dipped 0.2%, weighed down by concerns over slower economic recovery in China.
In the U.S., equity futures remained steady after the S&P 500 set a fresh record on Tuesday. European markets also pointed to a tepid open, with Euro Stoxx 50 futures falling 0.1%.
The U.S. dollar pared some of its previous session’s gains, with the Bloomberg Dollar Spot Index slipping 0.1%. This eased some of the pressure on emerging market currencies, which had been rattled by Trump’s tariff agenda.
The Mexican peso and Chinese yuan, which saw significant declines on Tuesday, stabilized. Meanwhile, the Japanese yen gained 0.2% to 152.74 per dollar, reflecting safe-haven demand amid ongoing global uncertainties.
Emerging markets continued to grapple with the implications of Trump’s renewed focus on tariffs. Reports suggest that his transition team is preparing to nominate Jamieson Greer as the U.S. Trade Representative. Greer, a key figure in Trump’s first-term trade policies, is seen as a proponent of a more restrictive trade stance.
“Prospects of further U.S. tariffs remain a worry for Asian markets,” noted Frederic Neumann, chief Asia economist at HSBC Holdings Plc. “The appointment of Greer as USTR, if confirmed, signals a continuation of Trump’s hardline trade policies, which could weigh heavily on export-driven economies in Asia.”
Investors are also keeping a close eye on upcoming U.S. economic data, including inflation and GDP figures, for clues about the Federal Reserve’s policy trajectory.
The New Zealand dollar rose as much as 0.8% after the Reserve Bank of New Zealand (RBNZ) lowered the official cash rate by 50 basis points. While the cut was widely anticipated, the central bank’s updated forecast suggested a slower pace of future rate reductions, signaling a potential shift in policy direction.
“The RBNZ’s decision to adopt a more measured approach to rate cuts has buoyed the kiwi,” said Jane Foley, senior FX strategist at Rabobank. “This stands out in a world where most central banks remain heavily tilted toward aggressive easing.”
Geopolitical concerns moderated somewhat as U.S. President Joe Biden announced a ceasefire agreement between Israel and the Lebanese militant group Hezbollah. The deal, brokered by U.S. mediators after weeks of tense negotiations, has provided temporary relief to markets sensitive to Middle Eastern instability.
The bond market saw little change following Tuesday’s modest rally. U.S. 10-year Treasury yields remained steady at 4.31%, as traders digested Federal Reserve minutes that highlighted support for a cautious approach to further rate cuts.
However, a bearish undertone in interest-rate options suggests that traders are bracing for a resurgence in yields. Bets on higher yields reflect concerns that the so-called “Trump trade” — characterized by tax cuts, protectionism, and fiscal stimulus — could regain momentum.
In Asia, Japan’s 10-year bond yield edged down one basis point to 1.060%, while Australia’s 10-year yield held firm at 4.45%.
Oil prices were steady early Wednesday as traders assessed a decline in U.S. crude stockpiles and looked ahead to an upcoming OPEC meeting. West Texas Intermediate (WTI) crude hovered near its recent levels, reflecting balanced market sentiment.
Gold also traded flat, with spot gold holding steady as traders awaited U.S. inflation data for direction.
Cryptocurrencies saw modest gains, with Bitcoin rising 0.8% to $92,387.62 and Ether advancing 0.1% to $3,326.90. Despite their volatility, digital assets continue to attract attention as an alternative investment amid ongoing macroeconomic uncertainties.
Economic Calendar
- Wednesday: U.S. Personal Consumption Expenditures (PCE), initial jobless claims, GDP
- Thursday: Eurozone consumer confidence (markets closed in the U.S. for Thanksgiving)
- Friday: Eurozone CPI; European Central Bank (ECB) consumer expectations survey for October
- Friday: “Black Friday,” marking the start of the U.S. holiday shopping season
