Asia report: Investors scared away as Trump touches everything
Markets in Asia finished lower on Thursday with traders clamouring for safe havens, as once again US President Donald Trump sent shivers through the spines of global markets.
AUD/USD
$0.6590
23:03 07/06/24
GBP/NZD
NZD2.0761
23:53 07/06/24
Hang Seng
18,366.95
10:21 07/06/24
Nikkei 225
38,683.93
09:43 07/06/24
USD/JPY
¥156.7180
01:08 08/06/24
Japan’s benchmark Nikkei 225 was 1.22% lower at 18,914.58, with the yen surging as investors exited equities for the perceived safe yen.
Politicians and policymakers roundly rejected Trump’s allegations earlier in the week that Japan was using the yen as a weapon against the US, with Prime Minister Shinzo Abe defending the mammoth stimulus programme currently being managed by the Bank of Japan.
Abe said the programme was intended to boost the Japanese economy, not manipulate the currency.
The yen was last 0.72% stronger on the greenback at JPY 112.43 per $1.
Markets on the mainland remained closed for the final day of China's Lunar New Year holiday, and were set to reopen for the first time in a week on Friday.
In South Korea, the Kospi spent much of the session bobbing above and below the waterline, but closed firmly down 0.46% at 2,071.01.
The drop came after data was released, suggesting a 2% rise in consumer prices for January, as a direct result of higher oil prices.
A Reuters-polled forecast was for a 0.4% firming of consumer prices.
Hong Kong's Hang Seng Index finished 0.57% lower at 23,184.52.
On the Trump front, markets had initially reacted positively to his administration in response to promises of tax cuts and the slashing of regulatory barriers.
But in less than two weeks since the start of his reign, the President signed several executive orders that put the kibosh on that positivity - including an immediate and chaotic travel ban barring travellers from several Muslim-majority countries, even visa holders who had already been vetted by immigration officials.
“The travel ban has seen uncertainty creep in around whether the new administration knows what it is doing and how isolationist Trump is prepared to the take the US,” noted AMP Capital head of investment strategy Shave Oliver.
Traders moved to safe haven metals and currencies, with gold, the yen and the New Zealand dollar all rising during the session.
The Federal Reserve, normally the main driver of Asian markets after it confirms its Open Market Committee decisions, unusually took a backseat to the orange man as it stood pat on its overnight rate target of 0.5% to 0.75%.
It did, however, point to perceived improvements in sentiment in the US economy, saying “measures of consumer and business sentiment have improved of late.”
Oil prices were sharply higher, which was - once again - directly related to the action in DC.
Tehran confirmed it fired a missile test on Wednesday, but claimed it was not in violation of its international nuclear deal.
US national security advisor Michael Flynn refuted that, saying Washington was “officially putting Iran on notice”.
That sent crude prices skyrocketing over jitters that the Trump administration could make a rash decision adverse to Tehran’s efforts to resuscitate its previously flagging oil and gas industry.
Brent crude was last up 0.82% at $57.28 per barrel, and West Texas Intermediate added 0.65% to $54.23.
In Australia, the S&P/ASX 200 finished 0.14% lower at 5,645.43, with gains in the gold subindex helping to stem the wider market’s losses.
Fresh data released during the day showed Australia having a seasonally-adjusted trade surplus of AUD 3.5bn for December - well ahead of market expectations, which were for a surplus of AUD 2.2bn.
Exports were ahead 5% during December thanks to a rise in coal and iron ore prices, with imports also strengthening 1%.
Boss Trump had a finger in Australian politics on Thursday as well, as reports emerged of tensions between the President and Prime Minister Malcolm Turnbull in a one-to-one phone call at the weekend.
The allegations - confirmed by unnamed White House sources in a number of publications - were that Trump heavily criticised a refugee deal between the two countries agreed to by former President Obama.
He also told Turnbull that it was the “worst call by far” he’d had with a political leader, before reportedly hanging up 25 minutes into the scheduled one hour conversation.
New Zealand’s S&P/NZX 50 closed down 0.03% at 7,035.54, led lower by construction and building products giant Fletcher Building, which lost 1.8%, and cargo carrier Freightways, down 1.7%.
The local markets did have some forward planning to do this week, after Prime Minister Bill English confirmed the date of this year’s general election as 23 September.
Incidentally, it was a weekend in which the All Blacks national rugby team had no games scheduled - allowing politicians and voters the chance to concentrate on the polls.
On the currency front down under, the Aussie was last 1.09% ahead against the greenback at AUD 1.3039, while the Kiwi advanced 0.44% to NZD 1.3675 per $1.