Most Asian markets extended a global rally Wednesday as investors gave a cautious welcome to Donald Trump’s first full day in office amid hopes he will take a more cautious approach on trade than initially feared.
Software investment giant SoftBank soared more than nine percent — leading Tokyo-listed chipmakers higher — after the American president said it was included in a new $500-billion venture to build infrastructure for artificial intelligence in the United States.
However, Hong Kong and Shanghai fell after the tycoon warned China could be included in a list of countries to be hit with tariffs on February 1 “based on the fact that they’re sending fentanyl to Mexico and Canada”.
Traders have been bracing for Trump 2.0 since his re-election in November, with an initial rally — fuelled by hopes for market-boosting measures — giving way to worries he would resume his trade war with Beijing and also target others.
There is also a concern that his plans to slash taxes, immigration and regulations will reignite inflation and crimp the Federal Reserve’s ability to cut interest rates.
Tokyo’s Nikkei 225 was the standout performer Wednesday, piling on more than one percent thanks to SoftBank’s advance fuelled by news that it will be part of the Stargate venture along with cloud giant Oracle and ChatGPT-maker OpenAI.
The project “will invest $500 billion, at least, in AI infrastructure in the United States” Trump said at the White House.
Japanese chipmakers also rose, with Advantest up more than four percent, while Tokyo Electron and Lasertec gained more than two percent.
Taipei also enjoyed a big jump, with chip titan and market heavyweight TSMC up more than two percent, while Seoul was also helped by big gains in SK hynix and LS Electric.
There were also gains in Sydney, Singapore, Wellington and Manila.
But Hong Kong lost more than one percent after a six-day run-up as concerns China will be hit with fresh tariffs dealt a blow to confidence. Shanghai also took a hefty hit.
– ‘No winners’ –
There had been optimism that Beijing would avoid being targeted in an early flurry of duties by the White House after Trump said Monday he would hit Canada and Mexico.
But he broadened his targets Tuesday to include China and the European Union.
When asked how soon these tariffs could be enacted, he said: “Probably February 1 is the date we’re looking at.”
The comments come after Chinese Vice Premier Ding Xuexiang told the World Economic Forum in Davos, Switzerland, that “protectionism leads nowhere and there are no winners in a trade war”.
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