Asian Markets Rally as Japan's Nikkei 225 Surges Amid Trade Uncertainty

BANGKOK -- Asian stock markets experienced a positive turn on Tuesday, buoyed by a significant rebound in Japan's Nikkei 225 index, which surged over 6% following a steep decline of nearly 8% the previous day. This recovery came in the wake of a tumultuous trading session on Wall Street, where U.S. stocks faced volatility after President Donald Trump threatened to escalate tariffs on Chinese imports.

On Tuesday morning, China's Commerce Ministry responded to Trump's tariff threats, vowing to 'fight to the end' and implement unspecified countermeasures to defend its economic interests. By late morning in Tokyo, the Nikkei 225 had climbed by 6.5%, reaching 33,148.52. Meanwhile, Hong Kong's Hang Seng index also showed signs of recovery, gaining 1.7% to reach 20,163.97, although it still struggled to recover from a staggering 13.2% drop on Monday, marking its worst day since the 1997 Asian financial crisis. The Shanghai Composite index increased by 0.8% to 3,121.72.

South Korea's Kospi added 1.6% to reach 2,364.22, while the S&P/ASX 200 in Australia also saw an increase of 1.6%, settling at 7,462.60. Other markets across New Zealand and Australia mirrored this upward trend.

In the U.S., the S&P 500 index fell by 0.2% as anxious investors awaited further developments in the ongoing trade conflict. Analysts suggest that if Trump can negotiate trade agreements with other countries, he may reduce tariffs, potentially averting a recession. Conversely, if he maintains his current tariff strategy, stock prices may continue to decline.

On Monday, the Dow Jones Industrial Average experienced a drop of 349 points, or 0.9%, while the Nasdaq composite saw a slight increase of 0.1%. The market opened significantly lower, with the Dow initially plunging nearly 1,700 points before recovering to a gain of about 900 points later in the morning. The S&P 500 index also fluctuated dramatically, rebounding from a loss of 4.7% to gain 3.4%, marking one of its most significant increases in years. This volatility was partly driven by a false rumor that Trump might consider pausing tariffs for 90 days, which was quickly dismissed by a White House statement labeling it as 'fake news.' The swift reaction of investors to such rumors underscores the high stakes involved as they seek indications of potential tariff relief from the administration.

As trade tensions escalated, Trump reaffirmed his stance on increasing tariffs against China following retaliatory measures from the Chinese government last week. His tariff policies represent a challenge to the globalization that has significantly influenced the contemporary economy, contributing to lower prices but also the offshoring of manufacturing jobs. Trump has expressed a desire to bring these jobs back to the U.S., a process that may require years of effort. While he aims to reduce trade deficits with other nations, the scope for negotiation appears limited on both sides.

In the commodities market, oil prices have declined due to concerns that a global economy hampered by trade barriers will lead to reduced fuel consumption. The price of benchmark U.S. crude oil fell below $60 for the first time since 2021 on Monday, though it saw a slight recovery on Tuesday, trading at $61.32 per barrel. Internationally, Brent crude gained 70 cents to reach $64.91 per barrel. In currency markets, the U.S. dollar strengthened against the Japanese yen, while the euro weakened against the dollar. Gold prices rose significantly, increasing by $38 to reach $3,011.60 an ounce. Bitcoin also saw a resurgence, gaining 2.1% to reach $80,081.17 following a drop below $79,000 earlier.