Abdelrahman
(Bloomberg) — Asian equity markets experienced declines as apprehensions surrounding a shift in U.S. geopolitical strategies dampened investor sentiment. The Japanese yen appreciated against major currencies.
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A measure of Asian stocks slid by 0.6%, while Hong Kong’s Chinese tech index fell as much as 3.6% after reaching a three-year peak. Treasury yields rose slightly, and gold prices remained close to all-time highs.
U.S. President Donald Trump is intensifying his demands for Ukraine to negotiate a peace agreement with Russia, which is alarming European allies who fear he may retract years of support for the Eastern European country. Additionally, uncertainties loom over his tariff plans as he suggested a potential 25% tax on lumber imports.
“Investors are growing anxious regarding President Trump’s strategy for addressing the Russia-Ukraine situation, worrying that it might take a negative turn,” stated Charu Chanana, chief investment strategist at Saxo Markets.
Futures for U.S. stock indices decreased. The yen climbed to its highest level against the dollar since December, fueled by rising speculation that the Bank of Japan might raise interest rates sooner rather than later, ahead of the country’s forthcoming inflation report on Friday.
The ongoing war in Ukraine continues to overshadow market performance in Europe, with regional officials expressing frustration over their exclusion from U.S.-Russia discussions in Saudi Arabia. In a move to escalate tensions, Trump referred to Ukrainian President Volodymyr Zelenskiy as a “dictator” on Wednesday, urging him to expedite negotiations.
Bond investors are now awaiting new defense funding details in Europe, as discussions about increasing military readiness gain traction in the wake of Trump’s policy adjustments. Recently, German Chancellor Olaf Scholz asserted that the European Union possesses sufficient strength to combat U.S. tariff threats, but he remains hopeful for a negotiated resolution to avert a trade conflict.
“We find ourselves in a highly fragmented global landscape,” remarked Ben Powell, chief APAC and Middle East investment strategist at BlackRock Investment Institute, during a Bloomberg TV interview.
Trump also mentioned the possibility of forging a new trade agreement with China, signaling his willingness to diffuse potential trade tensions between Washington and Beijing. The dollar weakened against all Group-of-10 currencies, as the yuan strengthened.
In Hong Kong, shares of Alibaba Group Holding Ltd. recorded a decrease of up to 4.6%, as investors refocused on the company’s upcoming earnings presentation, following a significant rally that added over $110 billion to its market capitalization. Meituan Inc. shares fell by as much as 6.9% after the ecommerce firm announced plans to broaden social security benefits for more employees.
