Asia-Pacific markets fell on Tuesday as renewed trade war concerns and monetary policy shifts dampened investor sentiment.

Wall Street’s overnight losses, triggered by US President Donald Trump’s tariff policies, fueled risk-off trading, while South Korea’s central bank cut interest rates to 2.75% to support its slowing economy.

Major indices across the region declined, reflecting heightened uncertainty over global trade and economic growth.

Japan’s Nikkei 225 dropped 1.34%, with the Topix down 0.72%.

In South Korea, the Kospi slipped 0.5%, while the Kosdaq lost 0.44%.

Australia’s S&P/ASX 200 fell 0.87%, and Hong Kong’s Hang Seng Index tumbled 1.94%, weighed by a continued pullback in Chinese tech stocks.

The CSI 300, tracking mainland China’s biggest firms, dipped 0.88%.

The Bank of Korea delivered a widely expected 25-basis-point rate cut, lowering its benchmark rate to 2.75% from 3%.

The move comes amid South Korea’s ongoing political instability, following the impeachment proceedings against President Yoon Suk Yeol.

The South Korean won weakened slightly to 1,430.1 per US dollar after the decision.

Overnight, US equities extended last week’s losses as Trump’s tariff announcements continued to weigh on sentiment.

The S&P 500 fell 0.5% to 5,983.25, while the Nasdaq Composite dropped 1.21% to 19,286.92.

The Dow Jones Industrial Average eked out a 33.19-point gain, closing at 43,461.21.

Trump reaffirmed plans to implement tariffs on Canada and Mexico after a one-month delay, raising concerns over global trade disruptions.

Buffett boosts Japanese trading houses

Japanese trading firms saw gains after Warren Buffett reaffirmed Berkshire Hathaway’s commitment to increasing its stakes in the sector.

Mitsubishi jumped 8%, while Itochu climbed 6.76%. Marubeni and Sumitomo gained 7.01% and 6.07%, respectively, with Mitsui edging up 0.75%.

Buffett confirmed that Berkshire’s ownership in these firms would rise beyond its previous 10% cap, fueling a rally in the sector.

Nissan slumps amid merger fallout

Nissan shares plunged as much as 9% before paring losses to 7.72% after failed merger talks with Honda and renewed US tariff threats.

The automaker is one of the most vulnerable to Trump’s proposed tariffs on Mexico, second only to Volkswagen in terms of exposure, according to S&P Global Mobility.

With trade tensions escalating and monetary policies shifting, Asian markets remain under pressure, with investors closely watching for further developments in the U.S.-China trade landscape and South Korea’s political climate.

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The Rolls-Royce share price has been one of the top-performers in the FTSE 100 in the past few years. It soared to a record high of $650 this month, bringing the gains from 2021 to 1,702%. In contrast, the FTSE index has jumped by over 76% from the same period.

Rolls-Royce stock has soared as investors cheered the actions of Tufan Erginbilgiç, the CEO who joined in 2023. It also soared alongside other industrial stocks like General Electric and Illionois Tool Works. Here are the top three reasons why the Rolls-Royce stock price may still soar in 2025.

Rolls-Royce share price has strong technicals

The first main reason why the Rolls-Royce stock price may keep rising is that it has strong technicals. The weekly chart shows that it has jumped from 65.75p in 2022 to a high of 650p.

It has formed an ascending channel in the past few years. The stock remains above all moving averages, a sign that investors are still bullish on the stock. In technical analysis, it is argued that an asset will remain in an uptrend as long as it is above the moving averages.

The Rolls-Royce stock price has also remained above the Ichimoku cloud indicator. It has also continued to form a series of higher highs and higher lows. Therefore, a strong surge above the all-time high will be a confirmation that the uptrend is continuing. That will lead to more gains, potentially to the next psychological level of 700p. 

However, there are a few risks to the bullish view. For one, there are signs that the stock is forming a bearish divergence pattern as the Relative Strength Index (RSI) and the percentage price oscillator have retreated. Therefore, while the general view for the stock is bullish, there is a risk that it will pull back, even to the psychological level of 500p.

RR chart by TradingView

Read more: Why has the Rolls-Royce share price jumped, and what is next?

Civil aviation sector is booming

The other reason why the Rolls-Royce share price may keep soaring this year is that the civil aviation industry is booming. IATA, an organization for airlines, estimates that revenue and profits for the biggest airlines will continue soaring this year. 

Passenger numbers will soar, pushing the total revenue to over $1 trillion. This is an important sector for Rolls-Royce Holdings because it accounts for over 50% of its business. It makes money by both selling aircraft engines and entering long-term service contracts. 

In most cases, the Rolls-Royce share price does well when the civil aviation sector is booming. A good example is what has happened in the past few years.

Rolls-Royce to hit its mid-term targets

Further, the Rolls-Royce share price will do well as the company has set ambitious targets that it is expected to meet. It expects to boost its operating profit from between £2.5 billion and £2.8 billion in the medium term.

The company is also hoping that the operating margin will move to between 13% and 15%, leading to a free cash flow of between £2.5 billion and £3.1 billion.There are signs that it will get to these targets ahead of schedule. 

Rolls-Royce Holdings hinted that its operating profit for 2024 will be between £2.1 billion and £2.3 billion. It also hinted that the FCF will be btwen £2.1 billion and £2.2 billion. These numbers mean that the operating profit target will be reached this year and the cash flow one in 2027.

There are other reasons why the Rolls-Royce stock price will keep rising. For example, Boeing has remained out of headlines meaning that the management is improving its business. There is also hope the company will handle the supply chain issues well and benefit from the power demand because of AI data centers.

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Gold prices declined on Tuesday, but managed to stay in proximity to recent highs. 

This was due to sustained haven demand, fueled by apprehensions surrounding the potential escalation of US trade tariffs and the deteriorating relationship between Washington and Beijing. 

The possibility of higher tariffs and increased trade tensions between the two largest economies globally has spurred investors towards safe-haven assets like gold, which are traditionally seen as a hedge against economic and political uncertainty.

Haresh Menghani, editor at FXstreet, said in a report:

Slightly overbought conditions on the daily chart prompt traders to lighten their bullish bets around the precious metal.

At the time of writing, the April gold contract on COMEX was at $2,952 per ounce, down 0.4% from the previous close. 

Gold price upward trajectory propelled by Trump tariffs

Gold prices experienced a surge in overnight trading, nearing a record high due to sustained safe-haven demand. 

This upward trajectory was further propelled by US President Donald Trump’s announcement that he intends to proceed with imposing 25% tariffs on Canada and Mexico by the following week.

The persistent demand for safe-haven assets, like gold, amid global economic uncertainties and geopolitical tensions has been a key driver of the metal’s price increase. 

President Trump’s unwavering stance on imposing tariffs on Canada and Mexico has introduced additional uncertainty into the global trade landscape. 

This has further fueled the demand for safe-haven assets, as investors anticipate potential disruptions to supply chains and economic growth. 

The tariffs could escalate trade tensions between the United States and its North American neighbors, potentially leading to retaliatory measures and a trade war.

Additionally, Beijing could retaliate further against Trump’s aggressive stance towards China. 

In February, Trump imposed a 10% tariff on all Chinese imports, and Beijing responded with a series of trade tariffs and export controls.

Zain Vawda, market analyst at OANDA, said in a report:

Risk aversion persisted in the markets…as the end of February draws to a close.

“The risk aversion tone is a result of the ongoing uncertainty of US trade and tariff policy,” he added. 

Will gold prices rise further?

The 2025 gold price rally has been fueled by several factors, one of which is the weakening of the US dollar. 

A weaker dollar makes gold, which is priced in dollars, relatively cheaper for holders of other currencies, increasing demand and driving up the price. 

This inverse relationship between the dollar and gold is a well-established trend in financial markets, often observed during periods of economic uncertainty or when investors seek safe-haven assets.

“Is the gold rally exhausted or will a touch of $3000/oz occur this week? That is the pertinent question this week, as $3000/oz remains a possibility,” Vawda said. 

Gold prices experienced a remarkable surge, appreciating for eight consecutive weeks by last Friday. 

This impressive performance marked the longest winning streak for gold since 2020 when it achieved nine straight weeks of gains. 

The sustained upward momentum underscored gold’s resilience and appeal as a safe-haven asset amid prevailing market uncertainties.

“While this could indicate the rally is losing steam, gold is so close to the $3,000 mark that it’s likely to at least touch that level briefly before pulling back,” Vawda added. 

According to Vawda, the bulls are currently in control, and if the market breaks through $2,956 per ounce, it could test $2,975 on its way to $3,000.

“I still think the 3000 handle will be hit, but the precious metal may struggle to find acceptance above this level at the first time of asking.”

Can gold outperform stocks?

Market analysts are increasingly predicting that gold prices will outpace stock market gains in 2025. 

This projection is fueled by a confluence of factors that are expected to keep the demand for gold high. 

Economic uncertainties, geopolitical tensions, and the potential for inflationary pressures are all contributing to gold’s appeal as a safe-haven asset. 

As a result, the price of gold is anticipated to rise significantly, potentially surpassing the returns offered by traditional equity investments in the coming year.

“Excluding the uncertainties around tariffs, central banks are another piece of the puzzle, with the Fed outlook in particular seeming murky,” Vawda said. 

Concerns around the stock market being overvalued and with retailers concerned about performance moving forward, this is becoming a real possibility. 

“The recent weaker US macro data reaffirmed bets for two quarter-percentage-points rate reduction by the Federal Reserve this year and might contribute to limiting losses for the non-yielding bullion,” Menghani noted.

US central bank needs more clarity before it can resume cutting interest rates, Chicago Fed President Austan Goolsbee cautioned on Monday, adding that a wait-and-see approach is warranted for now. 

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The IAG share price has retreated as some investors start to take profits. It has dropped for three consecutive days and moved to the current 326p, down from the year-to-date high of 367p. It is still one of the best performing FTSE 100 constituent after soaring by 260% from its lowest level in 2023. So, will the IAG shares soar after earnings?

Why IAG share price has retreated

The IAG stock price has dropped sharply in the past few weeks. This decline is likely because investors are taking profits after the stock almost doubled in 2024. It is not uncommon for stocks to pull back after rising so fast in a certain year.

The stock has also pulled back in sync with other airline companies. United Airlines stock, which surged in 2024, has dropped by over 15% from its highest level this year. Similarly, Delta stock has pulled back by 16%, while American Airlines stock is down by almost 20% from its highest level this year. 

Therefore, the ongoing airline stocks crash is likely because of the profit-taking among investors who benefited as they soared. It is not uncommon for stocks to take a breather after surging during a certain period.

Read more: IAG share price has surged: will it fly or sink in 2025?

IAG is doing well

The IAG share price has pulled back even as the company continues to do well, helped by its differentiated business model. The most recent results shows that the company’s revenues rose by 7.9% in the third quarter. Its operating profit rose by 15.4% to €2.01 billion, while its operating margin kept rising. IAG’ revenue rose by 7.9% to €9.32 billion. 

The company is seeing robust demand across all its brands like British Airways, Aer Lingus, and LEVEL. Demand rose by 1.2% in the third quarter, and the management expects the trend to continue as airfares moderate. This helps it to boost its load factor to about 90%.

IAG’s management has improved its balance sheet by ensuring that its leverage is about 1%. It is also adding to its fleet and improving its customer service. 

The company is also capitalizing on its highly profitable transatlantic route. Its Aer Lingus brand initiated new flights to Denver, Minneapolis, and Indiana. The other brands like British Airways and Iberia are doing the same.

All this has helped IAG to boost its payouts to shareholders. It paid an interim dividend of €0.3 and initiated a €300 million share buyback.

The next key catalyst for the IAG share price is its earnings, which will come out on Friday. Analysts expect that the company’s operating profit will be between €641 million or €996 million. The median estimate is €754 million.

IAG share price analysis

IAG stock chart by TradingView

The daily chart shows that the IAG stock price has been in a strong uptrend in the past few years as the civil aviation industry bounced back. It has pulled back in the past few days as investors wait for its earnings. 

The stock has remained above the 50-day Exponential Moving Average (EMA), a sign that bulls are in control. Therefore, there is a likelihood that the IAG stock price will bounce back, and possibly retest the key resistance point at 367p. A move above that level will point to more gains, potentially to 400p. A drop below the 50-day moving average level at 320p will invalidate the bullsh view.

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Shares of Japan’s top trading houses soared on Tuesday after Warren Buffett’s Berkshire Hathaway Inc. signaled plans to moderately raise its holdings in the sector.

The announcement was widely seen as a vote of confidence in companies like Mitsubishi Corp. and Marubeni Corp., which have gained global prominence for their diversified business models.

Mitsubishi surged 9.2% in Tokyo trading, heading for its biggest single-day gain in a year.

Marubeni jumped 8%, while Mitsui & Co., Itochu Corp., and Sumitomo Corp. also saw their strongest rallies since August.

The broader Topix index, however, slipped 0.2%.

Buffett’s long-term bet on Japan’s trading giants

Berkshire Hathaway initially invested in Japan’s five major trading houses in 2020, pledging at the time to keep its stake below 10%.

In his annual investor letter dated February 22, Buffett revealed that the firms had agreed to slightly relax that cap, allowing Berkshire to increase its ownership.

Analysts view Buffett’s move as a calculated bet on Japan’s trading houses, which engage in a vast range of businesses, from energy and commodities to retail and finance.

The sector’s diversification is seen as a safeguard against market volatility, particularly in a time of global economic uncertainty.

“Trading houses are trading well below their peak, so Buffett probably sees this as a chance to buy more,” said Norikazu Shimizu, an analyst at IwaiCosmo Securities Co.

“With Trump’s presidency and changes in tariff policies, the market outlook is uncertain, but these companies have a broad enough footprint to remain stable.”

Trading firms welcome Berkshire’s deepening involvement

Marubeni responded positively to Buffett’s interest, stating that his investment reaffirmed the strong valuation of Japan’s trading companies.

Buffett’s interest “is proof that the trading company sector, including our company, is highly valued,” Marubeni said in an emailed statement to Bloomberg.

Itochu, meanwhile, disclosed ongoing discussions with Berkshire about potential collaborations involving its subsidiaries, such as Duracell and Fruit of the Loom.

Buffett has previously praised Japan’s trading houses for their shareholder-friendly policies, including responsible dividend increases and stock buybacks.

He also noted their conservative approach to executive compensation compared to US firms.

“Over time, you will likely see Berkshire’s ownership of all five increase somewhat,” the veteran investor said.

“Our holdings of the five are for the very long term, and we are committed to supporting their boards of directors.”

A key metric of trading houses on the Topix index currently trades at about 10 times estimated earnings, compared to 14.5 times for the broader Topix.

Buffett’s continued investment suggests he sees long-term value in the sector despite these lower valuations.

Speculation mounts over Berkshire Hathaway’s next moves

Buffett’s deepening interest in Japan’s trading firms has fueled speculation over his next financial maneuver.

In October, Berkshire issued its largest-ever yen-denominated bond since it began borrowing in Japanese currency in 2019.

With yen notes maturing in April, investors are closely watching how the company will deploy its capital in the region.

Mitsubishi and Mitsui both confirmed they are in discussions with Berkshire over potential joint investments.

Analysts suggest Buffett’s involvement will provide a sense of security for investors and could serve as a catalyst for further growth in Japan’s trading sector.

“This is a tailwind for trading company stocks as a whole, and it seems likely to lead to a certain sense of security for investors,” said Hideyuki Ishiguro, chief strategist at Nomura Asset Management.

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