Shares in Japan, Australia and South Korea opened higher, while those in Hong Kong looked set to decline. Contracts for US equities advanced in early Asian trading as Trump announced a new investment push for artificial intelligence led by Softbank Group Corp., OpenAI LLC, and Oracle Corp. Treasury yields hovered near their lowest levels of the year.
While it’s early days, US-China relations are off to a better-than-feared start after Trump returned to the White House. The US president said he is considering a 10% levy in retaliation for the flow of fentanyl from the country, after threatening 25% for Mexico and Canada. The dollar was little changed.
“Risky assets should benefit from deregulation and tariffs emerging as not so bad as feared,” said Mohit Kumar at Jefferies International Ltd. “For rates, less onerous tariffs and likely lower oil prices should be a positive.”
As markets focused their attention on relations between the two economic superpowers, Chinese Vice Premier Ding Xuexiang told the annual World Economic Forum in Davos, Switzerland, that his nation will expand its imports “to promote balanced trade.” Meanwhile, President Xi Jinping hailed ties with Russia during a video call with Vladimir Putin as he urged deeper cooperation in response to “external uncertainties.”
Elsewhere in Asia, the Bank of Japan is moving toward deciding to raise interest rates at its policy meeting this week, Kyodo News reported. That supports recent speculation that the bank will hike by 25 basis points. The yen weakened slightly in early trading.
Data from New Zealand on Wednesday showed annual inflation was unexpectedly steady in the final three months of last year, remaining above the midpoint of the central bank’s target band.
In commodities, oil held losses as Trump threatened a tariff on China.
