The U.S. dollar climbed to its strongest level in roughly two-and-a-half weeks on Wednesday, as President Trump’s announcement of steep tariffs on copper (50%), with additional duties looming for semiconductors and pharmaceuticals, heightened global trade concerns. Markets are treating the tariffs as a potential negotiating lever, rather than final policy, contributing to volatility across commodities and currencies.
Asian stock markets fell into divergent territory:
- Japan’s Nikkei 225 edged higher by 0.3%, boosted by speculation that the August 1 tariff deadline may be softened after Tokyo’s diplomatic outreach .
- South Korea’s Kospi rose 0.5%, supported by emergency trade talks aimed at moderating tariff exposure.
- Mainland China’s CSI 300 increased modestly by 0.3%, though lingering economic softness weighed on confidence.
- Australia’s ASX 200 fell 0.5%, dragged down by energy and financial stocks.
- Hong Kong’s Hang Seng dropped 0.7%, impacted by political and regional trade concerns.
Copper futures surged to an all-time high on tariff news, before retracing amid supply chain disruption fears . Gold prices slipped to the lowest point in over a week, weighed down by rising yields and a firmer dollar. Oil prices eased after multi-session rallies, reflecting investor caution in a trade-driven environment.
Analysts such as Kyle Rodda of Capital.com point out that while the August 1 tariff deadline remains firm in Washington’s messaging, the simultaneous hint at potential delays signals a strategic posture to pressure trading partners. This has left markets in a state of tentative pause, awaiting clearer signals.
On the currency front, the dollar climbed 0.4% against the yen to ¥147.12, while other Asian currencies like the Australian and New Zealand dollars also weakened under pressure.
With negotiations active in Tokyo and Seoul and global investors scrutinizing tariff developments, markets are bracing for both short-term swings and longer-term strategic shifts in trade, supply chains, and monetary policy.
