Asian stock markets saw a small rise on Tuesday after a tough week. This slight recovery came as US President Donald Trump hinted at the possibility of reducing or pausing the high taxes (tariffs) on foreign cars and car parts. This news gave some relief to car companies and investors, especially in countries like Japan and South Korea, where many carmakers are based.
Last week, global markets were shaken due to confusion and concern over Trump’s unpredictable trade policies. However, his latest comments gave hope to some sectors.
“I’m looking at something to help some of the car companies with it,” Trump told reporters in the Oval Office.
He was referring to the 25% tariffs placed on cars and auto parts coming into the US from countries such as Mexico and Canada. These taxes can raise the cost of a car by several thousand dollars. Trump added that car companies “need a little bit of time because they’re going to make ’em here, ” suggesting he wants to give them a break as they work on making more cars in the US.
Car stocks rise in Japan and South Korea
After Trump’s statement, Japanese and South Korean stock markets showed better performance than others in Asia. Japan’s Nikkei index rose by 1%, with major car companies like Toyota and Mazda seeing strong gains. Toyota and Mazda shares jumped 5%, Nissan rose more than 3%, and South Korea’s Hyundai saw its stock go up by over 4%. Auto parts makers like Denso also benefited.
This boost in the auto sector helped bring some stability back to the Asian markets, which had faced a “rollercoaster ride” the week before. However, investors are still unsure because of Trump’s ongoing and sudden changes in trade policies.
Even though some markets performed well, Chinese markets were still weak. The CSI300 and Shanghai Composite Index both dropped by more than 0.4%. Hong Kong’s Hang Seng Index started the day strong but later fell by 0.16%. However, markets in Sydney, Singapore, Taipei, Manila, and Jakarta went up.
MSCI’s broadest index of Asia-Pacific shares outside Japan also increased slightly by 0.3%.
Investors still nervous as trade confusion continues
Trump’s recent actions and statements have confused investors worldwide. On Friday, he announced that smartphones, computers, and some electronics would not be taxed under the US tariffs for now. But just two days later, he said that new tariffs on semiconductors would be announced in the coming week.
US markets also showed signs of confusion. Futures for both the Nasdaq and S&P 500 dropped by 0.2% after showing gains the night before. In Europe, the EUROSTOXX 50 futures slipped by 0.14%, while the UK’s FTSE futures went up by 0.25%.
Meanwhile, the US bond market, which had gone through a major selloff last week, stayed mostly stable. The 10-year US bond yield held at 4.3564%, and the 2-year bond yield stayed near 3.8450%.
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