Asian markets hit by Trump fears, weak yen lifts Tokyo

Japanese stocks soared Monday as the dollar hit a four-month high against the yen on expectations of hikes in US interest rates, but most other Asian markets were hit by worries about the impact of Donald Trump’s presidency on global trade.

HONG KONG — Japanese stocks soared Monday as the dollar hit a four-month high against the yen on expectations of hikes in US interest rates, but most other Asian markets were hit by worries about the impact of Donald Trump’s presidency on global trade.

Equities around the world have seen volatile trading since the tycoon’s shock election win, with his pledge of big-spending measures and tax cuts leading to predictions of a surge in inflation and in turn higher borrowing costs.

The prospect of better and safer returns in the US has also led to an exodus from emerging markets and currencies, while the Mexican peso is also struggling owing to concerns about Mr. Trump’s warning he will tear up a key trade deal.

Tokyo’s Nikkei ended up 1.7%, with exporters rallying on the back of the weakened yen. The dollar was at ¥107.60, its highest mark since July.

CONUNDRUM

“The Federal Reserve now faces the conundrum of rising inflation expectations,” Chris Weston, chief market strategist in Melbourne at IG Ltd., said, according to Bloomberg News.

“What we saw last week was a genuine change in the thought process of many money managers, with some feeling we need to be prepared for inflation, while many others have been truly skeptical of the moves and note that while markets are firmly in the ‘ hope’ phase there are great execution risks.”

Japanese investors were also lifted by news the economy grew more than expected in the third quarter as exports offset slack consumer spending.

Wellington gained 0.5% as a deadly earthquake in New Zealand’s south island boosted construction firms on expectations of a rebuilding program.

Shanghai put on 0.5% despite data showing below-forecast retail sales and industrial output for October.

Hong Kong sank 1.4%, extending a heavy loss on Friday, while Seoul and Sydney each shed 0.5% and Singapore fell by 1.1%.

Manila dived 1.1% and Jakarta was 2.5% lower, with dealers concerned that Mr. Trump’s protectionist rhetoric could see him throwing up tariffs.

UNDER PRESSURE

The prospect of higher US interest rates battered higher-yielding currencies last week and, on Monday, South Korea’s won was down 0.6%, the Philippine peso fell 0.5% and the Thai baht lost 0.1%.

“Asian currencies continue under almost universal pressure in the aftermath of Donald Trump’s victory in the US presidential elections as traders bet that an isolationist and protectionist presidency could harm the region,” said Greg McKenna, chief market strategist at CFD and FX provider AxiTrader. —