Asia report: Markets mixed as investors brace for more volatility ahead
Asian stock markets finished in a mixed fashion on Wednesday as ongoing tariff-related uncertainty continued to weigh on risk appetite.
"The impact of tariffs is front of mind, given broad 25% duties on [US] imports of steel and aluminium have come into effect, with the risk of tit-for-tat retaliation high," said Susannah Streeter, head of money and markets at Hargreaves Lansdown.
"China has already responded with higher duties on American goods and the EU is planning counter tariffs, which are expected to come into force in April. The disquiet evident among investors on Wall Street, spread to Asia, with the Nikkei flat and Chinese indices in the red."
Japan's Nikkei 225 rose 0.1%, while the Hang Seng slipped 0.8% and the Shanghai Composite fell 0.2%. Elsewhere, benchmarks in Singapore, South Korea and Indonesia gained, but losses were recorded in Australia, New Zealand, India and Thailand.
Volatility eased slightly on Wednesday – the closely followed VIX index fell 6.8% to 25.96 – but still remains elevated by historic standards, having surged from the 15-point level just a month ago.
"A VIX north of 20 is when traders start paying attention, but once we breach 30, we’re firmly in panic mode—where risk managers start sweating, algo sell programs ramp up, and hedge funds scramble for cover," said Stephen Innes, managing partner at SPI Asset Management.
"At these levels, we’re no longer talking about elevated volatility; we’re entering a full-blown risk-off vortex where forced liquidations, margin calls, and flight-to-safety trades dominate the tape."
In other news, the yen jumped to an eight-week high on Wednesday, rising to JPY151.81 per dollar on speculation that the Bank of Japan will continue to hike interest rates to tame inflationary pressures.