BENGALURU: Indonesia led gains in largely firmer Asian equities and currencies on Wednesday, while the US dollar remained weak as President Donald Trump’s tariffs on China, Canada and Mexico prompted retaliatory levies.
The Indonesian rupiah was up 0.6%, while equities in Jakarta rose as much as 3%, recouping Tuesday’s 2.1% declines.
Trump triggered a trade war on Tuesday as his new 25% tariffs on imports from Mexico and Canada took effect, along with a doubling of duties on Chinese goods to 20%.
Canada and China quickly acted in kind the same day, while Mexican President Claudia Sheinbaum vowed retaliation but without details, saying she would announce Mexico’s response on Sunday.
The Mexican peso was trading 0.1% lower, after having risen 0.5% on Tuesday. The US dollar index hovered near the three-month lows it hit in the previous session.
“Tit-for-tat tariffs can undermine sentiments, and lead to demand for safe haven proxy, including US Treasury yields,” said Christopher Wong, a currency strategist at OCBC.
Softer US Treasury yields have given currencies such as the rupiah a breather, but the gains may not hold if yields resume their upward path, Wong said.
Trump, in a speech to Congress, spoke broadly about reciprocal tariffs being imposed from April 2, and mentioned India and South Korea as examples of countries with high levies.
The Indian rupee and the South Korean won were up 0.1% and 0.2%, respectively.
Stocks in Manila climbed 0.7% after data showed inflation eased more than expected in February. Inflation data from Thailand and Taiwan is due later in the week.
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