At Any Rate Asia Cross Asset: Liberation Day 2.0 and Asia
Jul 10, 2025
Join Sajjid Chinoy, Head of Asia Economics at J.P. Morgan, and Rajiv Batra, Head of Asia Equity Strategy, as they dissect the latest U.S. tariff announcements and their repercussions on Asian economies. They dive into declining growth projections impacted by export dynamics and discuss the central banks' responses amidst the turmoil. The conversation also covers the ripple effects on foreign exchange and market reactions, providing insights on stock selection strategies as Asia navigates a changing economic landscape.
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Asia's Growth Craters Amid Tariffs
- Asia's growth in H1 2025 was boosted by front loading and transshipment but is forecasted to crater in H2 due to tariff hikes and tightening trade policies.
- Tariffs targeting transshipment routes specifically aim to block Chinese exports routed through neighbors like Vietnam, impacting regional trade dynamics.
Soft Domestic Demand Drives Easing
- Despite resilient exports, Asia's domestic demand remains very soft, creating growth slack with benign inflation.
- The soft domestic demand justifies continued central bank easing across Asia, though financial stability concerns may adjust timing and magnitude.
Markets Brace for Targeted Tariffs
- This round of tariffs is more surgical, targeting select allies like Japan and Korea, and markets have priced in weaker US growth and tariff adjustments.
- Asian FX bullishness has become tactically harder due to overbought signals, but duration remains attractively positioned given expected monetary easing.