Asian stocks mostly decline on Wednesday, taking cues from a negative lead on Wall Street as US President Donald Trump’s new tariffs are set to come into effect later today, also mounting concerns that President Donald Trump’s tariffs could push the economy into a recession and force the Federal Reserve to cut rates further. Trump’s reciprocal tariffs came into effect today, including a cumulative 104% levy on Chinese imports. Traders were also disappointed by the lack of concrete developments in trade negotiations, even though President Trump spoke with various leaders from major trading partners. According to the Asian Development Outlook, developing Asian economies are projected to see a gradual deceleration in GDP growth, from 5.0% in 2024 to 4.9% in 2025 (the slowest since 2022) and further to 4.7% in 2026. Meanwhile, investors are awaiting the release of the U.S. Federal Reserve’s March policy meeting minutes, due later in the day, to gauge policymakers' rate cut pain point. Japan ( NKY:IND ) fell 4.19% toward 31,800 while the broader Topix Index tumbled 2.9% to 2,362 on Wednesday, giving back gains from the previous session. The Japanese yen appreciated past 146 per dollar on Wednesday, rising for the second straight session. Japan also faces a 24% tariff on its goods and a 25% levy on car shipments to the US. Meanwhile, Trump said that Japan is sending a team to negotiate on trade with the US, while Prime Minister Shigeru Ishiba revealed that he told Trump in a phone call to rethink his tariff policies. On the domestic front, Japan’s current account surplus surged to a record high in February, driven by strong export growth and a decline in imports, adding further support to the yen. The consumer confidence index in Japan dropped to 34.1 in March 2025 from a downwardly revised 34.8 in the previous month, declining for the fourth straight month and reaching its lowest level since March 2023. China ( SHCOMP ) rose 0.21% to below 3,100 while the Shenzhen Component lost 0.9% to 9,340 on Wednesday, reversing gains from the previous session as US President Donald Trump is set to impose a hefty 104% tariff on China in what appears to be an all-out trade war, and the offshore yuan climbed toward 7.38 per dollar on Wednesday, rebounding from three consecutive sessions of losses, supported by a depreciating US dollar. In the meantime, Beijing on Tuesday vowed to “fight to the end” to protect its interests, accusing the U.S. of engaging in economic blackmail, contrasts with the White House's claim that Trump won't back down on tariffs, and that China wants a deal, but doesn't know how to make one. Meanwhile, during a call with European Commission President Ursula von der Leyen on Tuesday, Premier Li Qiang emphasized that China’s macroeconomic policies are designed to address uncertainties and expressed confidence in sustained growth this year. Both China and Europe are preparing for significant impacts from new U.S. tariffs, with China facing a 104% surtax and Europe a 20% levy. Caution also grew ahead of China’s March CPI and PPI data due later this week, with deflation risks still looming. Hong Kong ( HSI ) fell 1.78% to 19,662 in early trade on Wednesday, reversing strong gains from the previous session. India ( SENSEX ) fell 0.53% to 73,865 in early deals on Wednesday, erasing gains from the previous session. However, the RBI's decision to cut interest rates by 25 bps to 6% capped the fall, despite the central bank revising its GDP forecast downward to 6.5% from 6.7% for FY2025-26, while inflation was revised to 4% from 4.2%. Australia ( AS51 ) fell 1.91% to around 7,360 on Wednesday, reversing gains from the previous session. The Australian dollar appreciated toward $0.60 on Wednesday, rebounding slightly from five-year lows. Australia will face the minimum 10% levy, with Trump taking a particular interest in blocking Australian beef amid long-standing restrictions on US beef exports to the country. In the U.S., on Tuesday, all three major indexes ended in red as optimism over global tariff negotiations soured after President Trump confirmed the imposition of a 104% tariff on China, effective tomorrow. Meanwhile, the Treasury Department auctioned $58 billion in 3-year notes on Tuesday, marking the first coupon supply since the tariff announcement. U.S. stock futures declined Wednesday as President Donald Trump’s sweeping tariffs came into effect today, including a 104% levy on Chinese imports: Dow -1.88% ; S&P 500 -2.04% ; Nasdaq -2.08% . Currencies: ( JPY:USD ), ( CNY:USD ), ( AUD:USD ), ( INR:USD ), ( HKD:USD ), ( NZD:USD ). More on Asia: China pledges to 'fight to the end' against new U.S. tariffs, escalating the trade dispute China's trade war escalation is 'big mistake,' Treasury's Bessent says Asia stocks under pressure; China, Japan see significant losses, down about 7% amid trade war Asia panic selling: Circuit breakers triggered in Japan, South Korea and Taiwan China, EU revive EV tariff talks following U.S. trade actions
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