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Asia stocks skittish after Wall St slumps on Trump-Fed feud; tariff jitters remain

2025-04-22 12:21:14

Most Asian stocks moved in a flat-to-low range on Tuesday as investors remained on edge over U.S. President Donald Trump’s trade tariffs and his persistent criticism of Federal Reserve Chair Jerome Powell.

Trump’s comments on Powell, specifically that the U.S. risks a recession if the Fed does not cut interest rates, sparked steep losses in Wall Street on Monday, a measure of which spilled over into Asia.

But U.S. stock index futures rose in Asian trade, with S&P 500 Futures up 0.6% amid signs of a potential rebound. Focus was on key upcoming first-quarter earnings this week, with Tesla Inc (NASDAQ:TSLA) to report later in the day.

Sentiment towards Asian markets remained weak as the U.S. and China showed few signs of deescalating a bitter trade war. Fears of tighter monetary conditions in Japan also weighed.

China stocks flat, Hong Kong dips; China warns against US trade deals

China’s Shanghai Shenzhen CSI 300 and Shanghai Composite indexes moved in a tight range on Tuesday, while Hong Kong’s Hang Seng shed 0.5% as trade resumed after a long weekend.

E-commerce stocks JD.com and Meituan slumped over 6% each, amid growing signs of heated competition in the lucrative food delivery sector.

China’s Commerce Ministry on Monday warned countries against striking trade deals with the U.S. at Beijing’s expense, while also accusing Washington of abusing tariffs.

Beijing’s comments come amid a bitter trade war between the world’s biggest economies, after Trump hiked tariffs on China to 145% earlier in April. China retaliated with a 125% levy on U.S. goods.

Beijing has repeatedly criticized Trump’s tariffs, and has so far signaled little openness to talks with Washington. High U.S. tariffs threaten to impact China’s export-heavy sectors, while also undermining local growth.

Japan stocks flat; PM Ishiba concerned over US tariffs

Japan’s Nikkei 225 index fell 0.1%, while the TOPIX was flat. Export-heavy sectors remained under pressure from a strong yen, which was at its strongest level in seven months on heightened safe haven demand.

Japanese Prime Minister Shigeru Ishiba said on Monday that while the country did not intend to scuttle a 2019 trade deal struck with the U.S., it would voice “grave concern” over inconsistencies between the deal and Trump’s latest round of tariffs.

A particular point of concern was Trump’s 25% tariffs on all foreign automobiles, which stand to greatly impact some of Japan’s biggest companies. Ishiba’s comments come as Japan gears up for trade talks with the U.S., with Ishiba also warning that the country will not just openly concede in discussions.

Japanese markets were also pressured by persistent concerns over more interest rate hikes by the Bank of Japan, after consumer inflation data for March rose as expected, remaining well above the BOJ’s target.

Focus this week is on Japanese purchasing managers index data for April, due on Wednesday.

Broader Asian markets moved in a tight range. Australia’s ASX 200 was flat ahead of April PMI readings due on Wednesday, while South Korea’s KOSPI rose slightly before first-quarter gross domestic product data due later this week.

Singapore’s Straits Times index was an outlier, rallying 1.2% as heightened economic uncertainty saw investors seek haven in local bank stocks.

Futures for India’s Nifty 50 index pointed to a positive open, after it surged more than 1% in the prior session.

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