Most Asian shares fell as traders weighed the impact of president-elect Donald Trump’s likely policy agenda and the stronger dollar on regional economies.
The MSCI Asia Pacific Index slipped for a third day as Treasury yields rose, threatening to lure funds back to US assets. Hong Kong shares led regional equity declines following reports that Trump’s cabinet will include a number of China hawks.
US and European stock futures also dropped and the dollar strengthened. While the so-called Trump trade helps boost the dollar and US stocks, the impact of the former president’s policies are expected to be less positive on assets elsewhere in the world.
His plan to boost tariffs is set to weigh on economies around the globe, especially countries such as China which are major exporters to the US.
“There are question marks around another round of Trump tariffs, the deficit and upward pressure on the dollar, forcing the Fed to slow the pace of easing,” said Phillip Wool, head of portfolio management at Rayliant Global Advisors.
“All of those anxieties seem to be registering more significantly with investors today and weighing on Asian shares.”
