Asian Markets Wobble as U.S. Tariff Policy Creates Global Uncertainty

Financial markets across Asia showed mixed results Monday as investors grappled with confusion over changing U.S. tariff policies. The dollar weakened while traders await earnings from tech giant Nvidia and monitor ongoing U.S.-Iran negotiations.

Financial markets across Asia displayed cautious trading Monday as investors sought clarity on shifting U.S. trade policies, while the American dollar weakened amid growing uncertainty about tariff implementation.

The market turbulence follows the Supreme Court’s decision to overturn President Donald Trump’s emergency tariffs, prompting him to declare a new 10% levy on global imports before quickly raising it to 15% – a move that apparently caught some administration officials off guard.

“The tariff landscape is now more uncertain than before, uncertainty is not good news for any economy or market,” said Rodrigo Catril, a senior FX strategist at NAB.

“Unless common sense prevails, we could be entering a circular process where new tariffs are announced, then potentially overturned, only for new tariffs to be announced, and we do the dance again.”

Key details about the tariff rollout remain unclear, including implementation timing, potential exemptions, and whether all nations will face the full 15% rate. Previously, countries like the UK and Australia operated under 10% rates, while many Asian nations faced higher tariffs.

Given the uncertainty, MSCI’s comprehensive Asia-Pacific stock index excluding Japan managed a modest 0.5% gain during quiet trading sessions. South Korea continued its impressive streak with another 2.0% increase, building on last week’s 5.5% surge to record levels.

Technology markets face a major test this week with Nvidia’s earnings announcement. The chip manufacturer, representing nearly 8% of the S&P 500, is projected to report a 71% jump in earnings per share to $7.76, though analyst predictions vary widely from $6.28 to $9.68.

Treasury markets felt the impact of tariff developments, as policy reversals could force the government to return approximately $170 billion in collected revenue. Such a scenario would theoretically expand the fiscal deficit by half a percentage point to roughly 6.6% of GDP.

Mixed economic signals also influenced trading, with December quarter growth falling short of expectations while core inflation exceeded forecasts. These developments reduced expectations for a June Federal Reserve rate cut from over 60% to around 52%.

Currency markets reflected the policy confusion, with the dollar declining 0.4% against the Japanese yen to 154.36, while the euro strengthened 0.4% to $1.1826. The Swiss franc also gained 0.5% against the dollar.

Commodity markets showed safe-haven buying, with gold rising 0.8% to $5,143 per ounce and silver jumping 2% to $86.24 after Friday’s nearly 8% climb.

Oil prices remained volatile following Trump’s warning of potential military action against Iran if nuclear negotiations fail. Talks are scheduled for Thursday in Geneva. Brent crude dropped 0.6% to $71.29 per barrel, while U.S. crude fell 0.8% to $65.95.