HONG KONG (AP) — Asian stocks were mixed on Wednesday after U.S. President Donald Trump’s latest remarks on tariffs stoked uncertainty in Chinese markets.
U.S. futures edged higher and oil prices fell.
Asian investors breathed a sigh of relief on Monday after Trump decided not to immediately impose steep tariffs on China. But on Tuesday, Trump said he was considering imposing a 10% punitive tariff on Chinese imports due to concerns about fentanyl being smuggled from China into the United States through Mexico and Canada.
Hong Kong's Hang Seng Index fell 1.7% to 19,755.11 points; the Shanghai Composite Index fell 0.9% to 3,213.62 points.
Tokyo's Nikkei 225 rose 1.6% to 39,646.25 points after Trump announced a joint venture aimed at investing up to $500 billion in artificial intelligence-related infrastructure. SoftBank Group’s Japan-listed shares soared 10.6% on Wednesday.
Taiwan's Taiex also rose 1%, with TSMC rising 1.3% after Trump promoted investment in artificial intelligence.
Elsewhere, South Korea's Kospi index rose 1.2% to 2,547.06 points; Australia's S&P/ASX 200 index rose 0.3% to 8,429.80 points.
U.S. futures were higher while oil prices fell.
The S&P 500 rose 0.9% to 6,049.24 on Tuesday, while many markets around the world took only tentative steps after Trump returned to the White House on Monday. The Dow Jones Industrial Average rose 1.2% to 44,025.81 points; the Nasdaq Composite Index rose 0.6% to 19,756.78 points.
Most stock indexes in Asia and Europe posted only modest moves as Trump promised sweeping moves to reshape global trade and the economy, often at the expense of other countries. In the bond market, U.S. Treasury yields gave back some of their recent sharp gains, while Bitcoin retreated from the record set the previous day.
In the foreign exchange market, the Mexican peso and Canadian dollar both fell against the U.S. dollar after Trump said he expected to impose 25% tariffs on imports from Canada and Mexico starting on February 1.
The threat of widespread tariffs, along with the possibility of other policies that could increase U.S. government debt, has helped push U.S. Treasury yields higher recently, which in turn has depressed stock prices. To compensate for this downward pressure, companies will need to deliver stronger earnings growth to support share prices.
U.S. Treasury yields have retreated, giving back some of their sharp gains in recent months on concerns that inflation remains elusive.
The 10-year Treasury yield fell to 4.56% from 4.62% Friday night. Like U.S. stocks, bond trading was closed Monday in observance of Martin Luther King Jr. Day.
The 10-year Treasury yield has been returning since last week's encouraging inflation data, but remains well above September levels, when it was below 3.65%.
Morgan Stanley strategist Michael Wilson said this movement in long-term interest rates appears to be the main driver of the overall U.S. stock market. He expects this pattern to continue, with stocks falling when yields rise and vice versa, at least until the 10-year Treasury yield sustainably drops below 4.50%.
Cryptocurrency markets surged on hopes Trump will make Washington more friendly to the industry, with Bitcoin pulling back from a record of over $109,000 on Monday to trade at $105,742 on Wednesday, according to CoinDesk.
U.S. benchmark crude oil prices fell 39 cents to $75.44 a barrel mid-Wednesday. Brent crude, the international standard, fell 26 cents to $79.03 a barrel.
The dollar-yen exchange rate rose to 155.83 yen from 155.46 yen. The euro traded at $1.0410, down from $1.0433.