Asian Stocks Mixed as Trump Tariff Shift and China AI Boost Weigh on Markets

Asian stocks traded in a tight range on Monday, as investors weighed the potential easing of U.S. trade tariffs under Donald Trump and monitored developments in China’s artificial intelligence sector. Most markets showed little movement, with Japan retreating slightly on weak business activity data.

Japanese stocks slipped as the March Purchasing Managers Index (PMI) showed contraction for the first time in five months. The Nikkei 225 remained flat, while the TOPIX dropped 0.3%. Manufacturing PMI declined for a ninth consecutive month, and services also contracted, signaling weaker domestic demand and pressure from global trade uncertainties.

Meanwhile, Chinese markets reversed early losses on renewed AI optimism. The Shanghai Shenzhen CSI 300 gained 0.5%, and the Shanghai Composite edged up 0.2%. Reports from Bloomberg revealed that Ant Group, backed by Jack Ma, developed cost-effective AI training methods using Chinese-made chips from Alibaba and Huawei, rivaling NVIDIA’s performance. This development fueled investor confidence in China’s tech self-reliance, lifting Alibaba shares by 0.5%.

Regional markets were largely muted as traders awaited clarity on Trump’s tariff strategy ahead of the April 2 deadline. Weekend reports suggested he may scale back tariffs to only about 15 countries with major trade imbalances, offering some relief to global markets. Wall Street futures rose in Asian trade, but sentiment in Asia remained cautious, given many targeted countries are in the region.

Elsewhere, Hong Kong’s Hang Seng stayed flat, while Australia’s ASX 200 saw little movement despite upbeat PMI data. Singapore’s Straits Times and South Korea’s KOSPI also hovered around flat, with the latter impacted by political uncertainty surrounding President Yun Suk Yeol. Indian markets appeared steady, with Nifty 50 futures pointing to a flat open after a strong prior week.