Asia-Pacific markets mostly higher on Tuesday mirrored an upbeat session on Wall Street overnight amid optimism that the Trump administration may adopt a more targeted approach to tariffs, easing tariff concerns. Meanwhile, investors await clarity on Trump’s reciprocal tariffs next week, with uncertainty over the size of the duties and targeted countries. Japan ( NKY:IND ) rose 0.45% above 38,000, while the broader Topix Index climbed 0.7% to 2,810 on Tuesday, with the latter approaching an eight-month-high. The Japanese yen remained weak at around 150.7 per dollar on Tuesday, hovering near a three-week low. Domestically, minutes from the Bank of Japan’s January meeting showed that policymakers remain open to additional interest rate hikes, depending on wage growth and inflation trends. One member suggested the policy rate could reach 1% in the second half of fiscal 2025. China ( SHCOMP ) rose 0.04% to 3,367, while the Shenzhen Component fell 0.6% to 10,635 on Tuesday , and the offshore yuan extended its decline to around 7.27 per dollar, hovering near two-week lows, pressured by growing concerns over the effectiveness of China’s stimulus measures in offsetting new US tariffs. On the monetary policy front, the People's Bank of China is changing its monetary policy by prioritizing the seven-day reverse repo rate over the medium-term lending facility rate. This move, while intended to manage liquidity, introduces uncertainty about borrowing costs. The central bank plans to issue significant MLF loans and has hinted at potential future rate cuts, which is putting downward pressure on the yuan. China’s fiscal revenue declined by 1.6% from a year earlier in the first two months of 2025, reversing a 1.3% increase in 2024. Meanwhile, government spending rose 3.4%, slightly easing from a 3.6% rise last year. China recently set a 5% GDP growth target and raised its deficit to a three-decade high while announcing plans to boost consumption and domestic demand. Hong Kong ( HSI ) fell 1.99% to 23,417 on Tuesday morning, reversing gains from the prior session amid concerns over U.S. recession risks and China’s deflation threat . India ( SENSEX ) rose 0.73% to 78,630 in morning deals on Tuesday, rising for the seventh straight session and hitting their highest level since early January, mainly boosted by strong performances in the tech, financial services, and banking sectors. Australia ( AS51 ) rose 0.05% surpassing 7,980 to reach its highest level in over two weeks. The Australian dollar remained steady at $0.628 on Tuesday, remaining sideways so far this week, as investors awaited the government’s general budget announcement. Meanwhile, markets anticipate no changes in monetary policy when the Reserve Bank of Australia meets next week. In the U.S., on Monday, all three major indexes ended higher driven by signs that U.S. trade sanctions may be less severe than feared, including President Trump’s suggestion that some countries could receive exemptions. U.S. stock futures drifted lower on Tuesday after Fed Bostic projected only one rate cut this year, citing rising inflation due to tariff concerns: Dow -0.20% ; S&P 500 -0.22% ; Nasdaq -0.23% . Currencies: ( JPY:USD ), ( CNY:USD ), ( AUD:USD ), ( INR:USD ), ( HKD:USD ), ( NZD:USD ). More on Asia: Japan’s manufacturing downturn extends to ninth month; services activity turns negative Japan’s core inflation rate slows to 3% in February, exceeds forecast; food prices slow slightly People’s Bank of China keeps lending rates unchanged, in line with expectations Australia's Feb unemployment rate remains unchanged at 4.1%, aligning with expectations Japan’s trade balance swung to surplus in February, driven by strong exports
