Investing.com- Asian shares were mixed in volatile trade on Tuesday after US President Donald Trump failed to impose steep tariffs on China on his first day in office as feared, although he still hinted at the possibility of future tariffs.
Risk-adjusted assets saw increased volatility as investors remained largely on the sidelines of Trump's policies. The US president signed a series of executive orders on his first day in office, from decrees to increase US oil production to postponing a ban on the social media app TikTok.
U.S. stock index futures were slightly positive in Asian trade but also saw increased volatility as Trump outlined plans to impose tariffs on China, Mexico and Canada.
Asian shares have had a weak start to 2025, although they have gained some ground in recent sessions on hopes that Trump's tariffs will not be as severe as first feared. Tariff uncertainty remained in play, keeping investors on the sidelines.
China's and indices fell slightly, while Hong Kong's index added 0.8%.
In Australia they rose by 0.6%, while in Singapore they rose by 0.6%.
South Korea fell 0.3%, while India's index pointed to a negative opening.
Trump is not signing day one tariffs, but is considering additional tariffs
Trump did not impose any trade tariffs on China, Mexico and Canada — three countries that have been the subject of his ire in recent months — on the first day of his presidency.
But Trump has signaled that he is reassessing US trade, specifically that he will impose 25% tariffs on imports from Canada and Mexico.
Trump also signed an order calling for an America First trade policy and directed federal agencies to look into unfair trade practices by other countries while reviewing current trade agreements.
Trump's orders fueled bets that he is still on track to impose higher trade tariffs against major economies, particularly China. This came despite Trump's positive dialogue with his Chinese counterpart Xi Jinping last week.
Increased trade tariffs may disrupt global trade and could also trigger retaliation from major economies, sparking a renewed global trade war between the US and other major economies.
But in Asia, China is expected to release even more stimulus in the face of a US trade war, which could boost local growth.
Japanese shares subdued as BOJ looms
Japanese stocks and indexes were little moved on Tuesday, with investors turning even more cautious on the country during the week.
The BOJ is expected to potentially raise interest rates further this week, especially as policymakers have hinted at the possibility of such a move in recent comments.
While the higher rates portend more pressure on Japanese markets, they also reflect the BOJ's increased confidence in the Japanese economy, which could make domestically exposed sectors more attractive.
However, the yen's strength, amid recent rate hike speculation, is expected to weigh on export-oriented sectors.
