(Sharecast News) - Asia-Pacific markets traded mixed on Tuesday as investors weighed the potential economic fallout from US president Donald Trump's latest tariff threats targeting 14 trading partners across the region.
According to letters posted by Trump on his Truth Social network, goods exported to the US from Japan, South Korea, Malaysia, Kazakhstan and Tunisia would now face 25% tariffs from 1 August.
Other Asia-Pacific markets faced higher tariffs, with Bangladesh, Cambodia, Indonesia and Thailand, set for levies of between 32% and 36%, while Laos and Myanmar would face a 40% charge.
"Most Asian stock markets saw gains as Trump indicated a willingness to continue trade discussions, providing a reprieve for investors after implementing significant tariffs on various nations," said TickMill market strategy partner Patrick Munnelly.
"On Monday, Trump stated he remained receptive to negotiations and postponed the implementation of higher tariffs until at least 1 August, easing investor concerns.
"Stock prices have bounced back from their April lows, when the broad tariffs were first announced, driven by optimism that the deadline for the tariffs might be extended, given Trump's pattern of making threats and then retreating."
Munnelly noted that at the same time, Japan's long-term bonds saw further declines on Tuesday, pushing the 30-year bond yield closer to an all-time high amid ongoing political uncertainties impacting the nation's financial markets.
"Australia's central bank surprised both investors and economists on Tuesday by maintaining interest rates at their current level, indicating a cautious stance on policy amidst global uncertainties fuelled by US tariff proposals.
"The Reserve Bank kept its key interest rate at 3.85%, a decision that only five out of 32 economists had anticipated, leaving traders caught off guard as well.
"The RBA has implemented two rate cuts in its ongoing easing cycle, and there is ongoing debate among economists regarding the potential for further easing due to the tight labour market and sluggish productivity growth."
Most markets finish higher after mixed session
Japan's Nikkei 225 rose 0.26% to 39,688.81, supported by sharp gains in industrial stocks.
Omron surged 9.14%, Sumitomo Electric climbed 7.97%, and Furukawa Electric added 6.53%.
The broader Topix index advanced 0.17% to 2,816.54, while the Japanese yen edged 0.1% lower against the dollar to trade at JPY 146.20.
In China, the Shanghai Composite gained 0.7% to 3,497.48, while the Shenzhen Component rose 1.47% to 10,588.40.
Renewable and manufacturing stocks led gains, with Saurer Intelligent Technology, Liuzhou Iron & Steel, and EGing Photovoltaic Technology all jumping over 10%.
Hong Kong's Hang Seng Index climbed 1.09% to 24,148.07.
Xinyi Solar gained 5.43%, Kuaishou Technology rose 5.16%, and Chow Tai Fook Jewellery advanced 4.42%.
In South Korea, the Kospi 100 outperformed with a 1.93% rally to 3,148.78, despite being among the countries affected by Trump's 25% tariff move.
Hana Financial jumped 10.27%, Hyundai Heavy Industries rose 9.01%, and Woori Financial Group added 8.32%.
Australia's S&P/ASX 200 was flat, up just 0.02% at 8,590.70.
Miners led marginal gains, with Resolute Mining up 9.6%, Westgold Resources rising 4.38%, and Clinuvel Pharmaceuticals up 4.36%.
The Australian dollar strengthened, with the greenback down 0.76% against the Aussie to AUD 1.5289.
Across the Tasman Sea, New Zealand's S&P/NZX 50 rose 0.74% to 12,859.02, supported by KMD Brands, which jumped 5.77%, along with Stride Property and Oceania Healthcare, which rose 4.2% and 4.11%, respectively.
The Kiwi dollar also strengthened, with its American counterpart last down 0.4% to change hands at NZD 1.6616.
In commodities, oil prices edged lower.
Brent crude futures were last down 0.32% on ICE to $69.36 per barrel, while the NYMEX quote for West Texas Intermediate declined 0.47% to $67.61.
RBA surprises with interest rate hold as Australia's business sector rebounds
In economic news, the Reserve Bank of Australia surprised markets on Tuesday by holding its benchmark interest rate at 3.85%, defying widespread expectations of a third rate cut this year.
The decision was split, with six members of the board voting to pause and three in favour of an immediate cut.
Governor Michele Bullock said the board remained committed to its easing path but preferred to wait a few weeks to confirm that inflation was on track.
"This decision is about timing rather than direction," she said.
Bullock noted that the board wanted to see the June quarter CPI data, due on 30 July, before moving again.
"We want to make sure we've nailed it," she added, stressing the risk of reigniting inflation prematurely.
Headline inflation fell to 2.1% in May from 2.4% in April, while underlying inflation eased to 2.4%, the lowest in over three years.
Despite growing pressure from homeowners and financial markets - where a 96% chance of a cut had been priced in - the RBA opted to hold fire until inflation data provided further confirmation.
In a notable shift, the RBA published a record of votes in its post-meeting statement for the first time, highlighting internal debate over the appropriate pace of monetary easing.
Meanwhile, fresh economic data from National Australia Bank showed signs of a rebound in the business sector.
Business conditions jumped 9 points last month to a 12-month high, driven by stronger sales, profits and hiring.
Business confidence also rose for a third consecutive month.
Forward orders and capacity utilisation also improved, with the latter reaching 83.3%.
Reporting by Josh White for Sharecast.com.
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