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Home News Asian Markets Mixed as Traders Weigh US-China Trade War and Tech Earnings

Asian Markets Mixed as Traders Weigh US-China Trade War and Tech Earnings

by Barbara

Asian equities posted mixed results on Wednesday as investors navigated renewed trade tensions between the U.S. and China, alongside key earnings from major Wall Street tech firms. While Chinese stocks edged lower and Hong Kong markets slipped, shares in Japan and Australia saw gains. Meanwhile, U.S. stock futures declined after Alphabet Inc. and Advanced Micro Devices Inc. tumbled in after-hours trading. Treasury yields inched higher.

China’s measured response to the latest U.S. tariffs suggests a more cautious approach from President Xi Jinping compared to his stance during Donald Trump’s first term. While Beijing swiftly retaliated to Washington’s 10% tariff hike, some investors see this as a controlled response aimed at preventing a full-blown economic confrontation. However, concerns persist that weaker-than-expected manufacturing data and a depreciating yuan could weigh on Chinese markets.

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To counter downward pressure on the yuan, China continued supporting the currency by setting its daily reference rate above 7.2 per dollar, signaling a commitment to stability amid trade war uncertainties.

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Despite the headwinds, Goldman Sachs projects a 14% gain in the MSCI China Index by year-end, citing expectations for Beijing’s long-awaited policy stimulus.

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Trade tensions escalated further as Trump’s new tariffs on Chinese goods took effect at midnight Washington time on Tuesday. Within moments, Beijing hit back with tariffs on roughly 80 U.S. products, an antitrust investigation into Google, tightened export controls on critical minerals, and the addition of two American firms to its unreliable entities blacklist.

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Trump, however, downplayed the urgency of negotiations, telling reporters that talks with Xi Jinping will happen “at the appropriate time.”

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Beyond trade concerns, Japan’s central bank may continue raising interest rates beyond current market expectations, according to a former Bank of Japan executive director. The yen strengthened to around 154 per dollar on Tuesday.

In commodities, oil prices dipped as fears of slowed global growth due to the trade war overshadowed the impact of new U.S. sanctions on Iran.

Meanwhile, U.S. markets had previously rebounded as dip-buyers drove a 1.7% gain in a Bloomberg index tracking the “Magnificent Seven” megacap stocks. However, continued volatility in tech stocks could influence broader market sentiment in the days ahead.

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