(Sharecast News) - Asia-Pacific markets were mixed on Wednesday as investors digested escalating trade tensions linked to Donald Trump's threats over Greenland, while a sharp move into safe havens pushed gold to a fresh record.
Spot gold jumped more than 1% to an all-time high of $4,813 per ounce after Wall Street posted its worst session since October, though US stock futures edged slightly higher in early Asian trading.
As Patrick Munnelly at TickMill noted, "safe-haven assets continued to attract investors, with gold and platinum reaching new highs, while silver neared its historical peak".
Sentiment was unsettled after Trump said exports from eight European countries would face tariffs of 10% from 1 February, rising to 25% by 1 June if talks failed to secure US control of mineral-rich Greenland.
He also threatened 200% tariffs on French wine and champagne after reports that Emmanuel Macron was unwilling to join his proposed "Board of Peace," and criticised the UK's plan to transfer sovereignty of the Chagos Islands to Mauritius as an "act of great stupidity."
Munnelly said that "president Trump's announcement of tariffs on European nations that rejected his proposal to purchase Greenland further rattled investor sentiment," adding that the move came after "an AI-driven rally that had pushed global equities to record highs."
European leaders labelled the tariff threats "unacceptable," with France reportedly urging the EU to consider deploying its Anti-Coercion Instrument.
Markets mixed across Asia
In Japan, equities fell, with the Nikkei 225 down 0.41% at 52,774.64 and the Topix sliding 0.99% to 3,589.70.
BayCurrent dropped 6.64%, T&D Holdings fell 4.15% and Ricoh Company declined 4.07%.
The equity weakness came despite signs of stabilisation in bond markets, with Munnelly noting that "Japanese bonds rebounded strongly following a sharp selloff that reverberated across global debt markets," adding that "the yield on Japan's 40-year bonds fell 22 basis points to 3.99% after finance minister Katayama called for calm, following a selloff that had driven long-term yields to unprecedented levels."
He added that "the turmoil in Japan's bond market during the Asian trading session spilt over to European and US markets, leading to declines and rising bond yields."
China's markets were steadier, with the Shanghai Composite up 0.08% at 4,116.94 and the Shenzhen Component rising 0.7% to 14,255.12.
Montage Technology surged 11.9%, Harbin VITI Electronics gained 10.09% and Beijing Hanjian Heshan Pipeline rose 10.07%.
Munnelly said broader equity markets remained fragile, noting that "Asian equities declined 0.7%, and European stock futures suggested a flat opening," underscoring lingering caution despite pockets of strength.
Hong Kong stocks advanced, with the Hang Seng Index up 0.37% at 26,585.06, led by SMIC up 3.69%, Kuaishou Technology up 3.62% and WuXi Biologics higher by 3.5%.
South Korea outperformed, as the Kospi 100 climbed 0.98% to 5,481.44.
Hyundai Motor surged 14.61%, Hyundai Mobis jumped 8.09% and Kia Corporation rose 5%.
Munnelly said US equity futures had edged higher, with "S&P 500 futures rose 0.3%, hinting at some recovery after the index experienced its steepest drop since October," though he cautioned that "global stock markets remained under pressure."
Sydney, Wellington in the red
Down under, Australia's S&P/ASX 200 slipped 0.37% to 8,782.90, with DroneShield down 8.86%, Telix Pharmaceuticals off 7.66% and Xero lower by 5.15%.
New Zealand stocks lagged, with the S&P/NZX 50 falling 1.15% to 13,417.17, as Serko declined 3.61%, Ryman Healthcare eased 2.68% and Auckland International Airport dropped 2.59%.
Munnelly said the market reaction had "evoked memories of the notorious 'Sell America' trend," leaving investors debating whether Trump's stance on Greenland was firm or tactical, with some "hoping this could be a calculated bluff aligned with his 'Art of the Deal' methodology."
Dollar softens as oil prices slip
In currency markets, the dollar softened, last trading down 0.08% on the yen at JPY 158.02, as it lost 0.14% against the Aussie to AUD 1.4824 and slipped 0.16% on the Kiwi to change hands at NZD 1.7120.
Oil prices also retreated, with Brent crude futures last down 0.69% on ICE at $64.47 per barrel and the NYMEX quote for West Texas Intermediate off 0.65% at $59.97.
Munnelly added that investors were now "looking to [Trump's] highly anticipated Davos speech later today, hoping for a possible softening in his stance," as markets weighed whether political rhetoric would translate into sustained economic disruption.
Reporting by Josh White for Sharecast.com.
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