Jan 14, (V7N) - Asian markets showed mixed performance on Tuesday as investors balanced bargain buying with concerns over the global economic outlook and the potential impacts of Donald Trump's second presidency. Reports that Trump’s economic team is considering gradual tariff hikes provided some market support and curbed the dollar's recent rally, despite continued investor anxiety over his plans for tax cuts, deregulation, and reduced immigration, which could stoke inflation.

Expectations for Federal Reserve interest rate cuts have been scaled back sharply, with traders now predicting only one cut in 2025, down from four previously forecasted. Some even speculate the next Fed move could be a rate hike due to persistent inflation and uncertainty surrounding Trump’s economic policies. A stronger-than-expected U.S. jobs report last week further dampened hopes for near-term rate cuts, pushing Wall Street into the red.

In Asia, markets were mixed: Hong Kong, Shanghai, Sydney, Wellington, Taipei, and Jakarta saw gains, while Singapore, Manila, and Seoul experienced losses. Tokyo's Nikkei 225 dropped 1.8% as traders returned from a holiday to react to Monday’s global market sell-off.

The U.S. dollar eased after Bloomberg reported Trump's team may gradually raise tariffs to control inflation and strengthen trade negotiations. However, the pound and euro remained weak, with the euro nearing parity with the dollar.

Investors are now focused on upcoming U.S. inflation data and the start of corporate earnings season. Analysts warn that despite solid fourth-quarter earnings, persistent inflation, rising yields, and revised Fed expectations could weigh on market sentiment.

Key market figures as of 0230 GMT:

Tokyo (Nikkei 225): Down 1.8% at 38,469.58

Hong Kong (Hang Seng Index): Up 1.0% at 19,070.30

Shanghai (Composite): Up 1.3% at 3,202.40

Euro/Dollar: Up at $1.0244

Pound/Dollar: Up at $1.2210

Dollar/Yen: Down at 157.58 yen

WTI Crude: Down 0.2% at $78.66 per barrel

Brent Crude: Down 0.3% at $80.76 per barrel

Dow Jones: Up 0.9% at 42,297.12

FTSE 100: Down 0.3% at 8,224.19

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