Global Funds Position for Wild Ride in Run-Up to Tariff Deadline
Asian investors are bracing for a flurry of official statements and social media posts as US President Donald Trump’s tariff deadline approaches.
With trade agreements yet to be struck for Japan, South Korea and India, investors from Fidelity International to Blue Edge Advisors are either hedging or reducing equity exposure, or getting ready to pounce on market declines on expectations that any bad news will be temporary.
The MSCI Asia Pacific Index is trading near its highest level since September 2021, and volatility has dropped well below its average over the past year, as a playbook based on Trump always backing away from his initial postures spurred risk appetite. Still, only Vietnam in Asia has struck a deal, and Trump has threatened to send out letters notifying trading partners of new tariff rates as soon as Friday.
“Let’s just say my phone battery won’t get much rest this weekend,” said Hebe Chen, a market analyst at Vantage Markets in Melbourne. “My brain is fully prepped to stay alert to what’s shaping up to be an anything-is-possible weekend.”
Nerves have been frayed in Japan, with the Nikkei 225 notching its worst week since May amid a perceived lack of progress in discussions. Indian stocks have also been sluggish despite the nation’s relative lack of tariff exposure. And Korean investors are tense even as the market surges on expectations for the nation’s new leadership.
“I am a bit concerned for Korea as Trump and Lee Jae Myung, the new president, have not actively engaged each other,” said Jung In Yun, chief executive officer at Fibonacci Asset Management Global Pte. He has trimmed some equity exposure and is holding more cash than usual.