Asian markets concluded Monday's trading with varied outcomes in response to U.S. President Donald Trump's announcement of impending tariffs on all steel and aluminum imports. In addition, Trump plans to introduce reciprocal tariffs on multiple countries this week, signaling a significant intensification of his trade policy reforms. Investors are closely monitoring upcoming testimony from Federal Reserve Chair Jerome Powell to assess the potential impact of these tariffs and other policy changes on economic recovery efforts.
The U.S. dollar strengthened amid escalating tariff concerns and ahead of a crucial U.S. inflation report expected this week. Meanwhile, spot gold prices surged over 1%, reaching a new peak, while oil prices gained in Asian markets following several weeks of declines.
Chinese markets showed gains as mixed inflation data fueled optimism that Beijing might implement further stimulus measures, such as interest rate cuts or increased infrastructure spending, to support economic growth. Reports indicated that China's consumer inflation rose for the first time since August, driven by heightened household spending during the Lunar New Year, while the producer price index continued its downward trend. Consequently, the benchmark Shanghai Composite index advanced by 0.56% to close at 3,322.17, following China's implementation of import duties on certain U.S. goods.
In Hong Kong, the Hang Seng index climbed 1.84% to 21,521.98, primarily propelled by Chinese stocks in the artificial intelligence sector, with Baidu gaining 3.7% and Alibaba rising 5.5%. Xiaomi Corp saw a 3.1% increase, reportedly developing a midrange device powered by the Snapdragon 8s Elite.
Japanese markets experienced fluctuation before ending mixed, as President Trump threatened tariffs on Japanese products unless the U.S. trade deficit with Tokyo is resolved. The Nikkei average closed modestly higher at 38,801.17, while the broader Topix index fell by 0.15% to 2,733.01. In South Korea, the Kospi average ended slightly down at 2,521.27, with Hyundai Steel and POSCO Holdings dropping over 2% and 0.8%, respectively.
Australian markets also saw slight declines, predominantly led by the mining sector, as the S&P/ASX 200 decreased by 0.34% to 8,482.80 and the All Ordinaries index fell by 0.37% to 8,747.60. Notably, BHP Group shares fell by nearly 1%, Rio Tinto by 1.2%, and Fortescue Metals Group by 1.5%. Trade Minister Don Farrell commented, "Australian steel and aluminum create thousands of quality American jobs and are vital for our shared defense interests." In New Zealand, the S&P/NZX-50 index dipped by 0.20% to 12,876.35.
In the United States, stocks fell sharply on Friday amid renewed concerns over tariffs and inflation. The latest employment report provided mixed signals, with the unemployment rate decreasing to 4% but fewer than anticipated jobs being added in January. Nonfarm payrolls increased by 143,000 last month, significantly below December's revised 307,000 and the forecasted 169,000. Additionally, a measure of U.S. consumer sentiment unexpectedly declined in February, while one-year inflation expectations climbed to 4.3% from 3.3%—the highest level since 2023. The technology-focused Nasdaq Composite dropped 1.4%, while both the Dow and the S&P 500 saw losses of around 1%.
