Asian Markets Surge Amid US-China Tariff Easing Hopes; Wealthy Investors Shift from US Assets

Asian markets showed cautious optimism as US President Trump suggested reducing tariffs on Chinese goods, potentially easing trade tensions. Japan's Topix index marked its longest winning streak since 2017, while Hong Kong shares fluctuated. Wealthy Asian investors are reducing US asset exposure due to unpredictable US trade policies, reallocating to Asian and European markets. Institutional investors are also shifting away from US equities and Treasuries. The tariff changes and capital shifts reflect broader concerns about US stability as an investment destination amid high tariffs and retaliatory measures from China.

Japan’s Topix Extends Rally Amid Trade Optimism

Japanese equities surged on Friday, buoyed by growing investor confidence that the worst of the US-China trade war may be over. The Topix index rose 0.9% to 2,720, marking its 11th consecutive day of gains—the longest streak since October 2017. The Nikkei 225 also climbed 1.2% to surpass 37,300, tracking overnight gains on Wall Street following Trump’s announcement of a trade agreement with the UK and his suggestion that tariffs on Chinese imports could be lowered.

The rally was supported by strong domestic data, including a better-than-expected rise in personal spending in March, which signaled resilience in Japan’s consumer demand. Sector-wise, the Japanese market was led by gains in technology (+2.33%), telecom (+2.17%), and real estate (+2.12%). Notable performers included NTT DATA Group, which surged 18.5% over the past week, and Tokyo Electron, which gained 5.4% despite a year-on-year earnings decline.

According to Trading Economics, the broader JP225 index has declined 6.14% since the start of 2025, but recent momentum suggests a potential reversal if trade tensions continue to ease.

Hong Kong Shares Fluctuate as Investors Weigh Tariff Signals

In contrast to Japan’s steady climb, Hong Kong’s equity markets fluctuated on Friday as investors digested mixed signals from Washington. While Trump hinted that the 145% tariffs on Chinese goods could be slashed to as low as 50% in upcoming negotiations, he also stated he had no immediate plans to speak with Chinese President Xi Jinping.

Despite the uncertainty, market sentiment in Asia improved broadly. “Trump’s tone on China was the real signal for markets,” said Stephen Innes of SPI Asset Management. “The president all but greenlit the idea that the days of punitive standoff might give way to negotiated momentum.”

Trump’s Tariff Comments Spark Market Reactions

The shift in tone from the White House came as Trump unveiled a trade deal with the UK, the first since his administration imposed sweeping tariffs last month. Speaking from the Oval Office, Trump said, “It’s at 145 so we know it’s coming down,” referring to the current tariff rate on Chinese imports. Sources close to the negotiations confirmed that US officials are considering reducing the tariff to between 50% and 54% as early as next week.

While Trump maintained that China “deserves” the tariffs, he acknowledged that “at some point, I’m going to lower them,” suggesting a willingness to deescalate if talks progress. High-level negotiations between US Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng are scheduled to take place in Switzerland over the weekend.

Asian Investors Pull Back from US Assets

As markets react to the possibility of a thaw in US-China trade relations, Asia’s wealthiest investors are making a decisive shift away from US assets. According to multiple reports, family offices and high-net-worth individuals across the region are reducing or exiting their US holdings entirely, citing the unpredictability of Trump’s trade policies.

One family office managing assets for Chinese billionaires has fully divested from US markets, reallocating capital to Asia. A top bank executive in Asia disclosed that he had liquidated 60% of his US portfolio, opting instead for cash and gold. “These families weathered the dot.com bubble, the Asian financial crisis and the 2008 global crisis while maintaining faith in US assets. Now, however, they are exploring reallocating 20% to 30% of their US portfolios to China and Europe,” said a senior advisor.

The trend is not limited to individuals. Institutional investors such as Janus Henderson and Amundi have also reported a pullback from US equities and Treasuries, with clients increasingly favoring European funds and yuan-denominated assets. Banks and brokers across Asia are seeing a surge in demand for currency derivatives that bypass the US dollar, including transactions in yuan, the Hong Kong dollar, and the euro.

Broader Implications for Trade and Capital Flows

The capital shift reflects a broader reassessment of the US as a stable investment destination. Trump’s imposition of tariffs as high as 145% on Chinese goods—and retaliatory measures from Beijing, including 125% tariffs on US imports—have rattled global markets and disrupted supply chains. While Trump has defended the tariffs as necessary, the lack of clarity on implementation and future policy direction has added to investor unease.

In Taiwan, for example, the government has criticized the 32% tariff imposed on its exports as unfair, while Southeast Asian nations face levies ranging from 32% to 49%. These measures have prompted concerns about inflation, reduced demand, and the risk of a broader decoupling between the US and Asian economies.

Despite the uncertainty, some investors see opportunity. “High-net-worth clients are retrenching and re-evaluating their global allocation of capital,” said Carman Chan, founder of Click Ventures. “They are allocating more to Asia, primarily China and Hong Kong, where valuations are more attractive.”

References

• Trump tariffs live updates: Trump unveils 'breakthrough' US-UK trade deal, first since 'Liberation Day'
• Exclusive | US weighs plan to slash China tariffs to as low as 50% — down from 145% — as soon as next week: sources
• Asian stocks lifted by hopes for US-China talks after UK deal
• Japan Stock Market Index (JP225) - Quote - Chart - Historical Data - News
• Japanese (NIKKEI) Market Analysis & Valuation - Updated Today
• Asia’s super rich rapidly scale back US exposure on Trump’s trade war
• Asia’s super-rich rapidly scale back US exposure on trade war