TOKYO, July 8 (Reuters) – Stock markets in Asia took in stride the latest twist in U.S. President Donald Trump’s tariff roll-out on Tuesday, as the dollar held onto gains and oil retreated.
Shares on Wall Street fell after Trump sent letters to 14 countries, including Japan and South Korea, unveiling sharply higher tariffs on imports into the United States, while also postponing their implementation to August 1.
Sign up here.
Japan’s Nikkei stock gauge (.N225)
, opens new tab opened lower but then turned positive after Trump described that deadline as “firm, but not 100% firm” and said tariffs may be adjusted for some countries.
The Aussie dollar surged after the Reserve Bank of Australia left policy rates unchanged, defying expectations for a cut.
Market reaction to the tariff announcements was muted on memories of Trump’s rapid walk back of his “Liberation Day” duties initially set out on April 2, said Tapas Strickland, head of market economics at National Australia Bank.
“There’s going to be a lot of volatility as the headlines start to emerge, as more of these letters come out, and as the negotiations really come to the fore ahead of that August 1 deadline,” Strickland said on an NAB podcast.
In April, Trump capped all of the so-called reciprocal tariffs with trading partners at 10% until July 9 to allow for negotiations. Only two agreements, with Britain and Vietnam, have been reached. In June, Washington and Beijing agreed on a framework covering tariff rates, restoring a fragile truce in their trade war.
Tariffs on Japan and South Korea are now due to go up to 25% on August 1. Japanese Prime Minister Shigeru Ishiba called the hike deeply regrettable and said his nation would continue negotiations with the U.S. Thailand’s finance minister Pichai Chunhavajira said his country is preparing a back-up plan to deal with the 36% tariff imposed on its exports.
The European Union will not be receiving a letter setting out higher tariffs, EU sources familiar with the matter told Reuters on Monday. The EU still aims to reach a trade deal by Wednesday after European Commission President Ursula von der Leyen and Trump had a “good exchange,” a commission spokesperson said.
MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS)
, opens new tab rose 0.3%. Japan’s Nikkei stock index (.N225)
, opens new tab added 0.4%, while South Korea’s KOSPI (.KS11)
, opens new tab jumped 1.5%.
The dollar appreciated 0.1% to 145.88 yen , after touching a two-week high. The euro rose 0.3% to $1.1744. The Aussie dollar rose 0.8% to $0.6541.
The RBA left its cash rate steady at 3.85%, a shock for markets that had confidently priced in a cut, saying the majority of the board wanted to wait for more information to confirm inflation was slowing.
U.S. crude dipped 0.5% to $67.61 a barrel after surging nearly 2% on Monday. Spot gold slid 0.2%.
Pan-region Euro Stoxx 50 futures were down 0.2%, German DAX futures were also down 0.2%, and FTSE futures slid 0.4%.
Reporting by Rocky Swift; Editing by Jacqueline Wong and Sonali Paul
Our Standards: The Thomson Reuters Trust Principles.
Reports mainly on pharma, retail and breaking news in Japan. Previously worked at U.S. Department of State and Bloomberg News before that. New College of Florida and University of Hawaii alum. Former Poynter and JAIMS fellow.
