Insights

The US recently announced a new reciprocal tariff policy. The announcement led to increased stock market volatility globally, reflecting concerns about a potential trade war. There could still be opportunities for those who can navigate market volatility. The US's strategy, perceived as a high-stakes game, has led to uncertainty. The response from surplus-holding nations and global market dynamics will be crucial in shaping the economic landscape.

We discuss the implications of the expansive new tariffs unveiled by the US and explore the effects on markets, consumer sentiment and potential future outcomes from a Japanese market perspective.

The Nikko Asset Management Global Equity team's investment philosophy is based on the belief that "Future Quality" companies will outperform over the longer term. When macroeconomic drivers are uncertain, diverse and unique alpha sources are even more essential.

We downgraded our defensive position marginally, while we maintained an overweight to growth assets.

With the US “exceptionalism” narrative fading, we see value in global diversification. We observe potential turning points in Europe and China equities that may serve as opportunities to diversify global portfolios. Volatile market conditions may be the new normal, but opportunities may emerge due to greater differentiation among firms and economies.

As the rest of the world contends with the geopolitical and economic implications of Trump 2.0, ASEAN presents a wealth of long-term investment opportunities, driven by strong fundamentals and supportive policies.

We continue to believe that Asia’s local government bonds are positioned to perform well, supported by accommodative central banks amid an environment of benign inflation and moderating growth.

While US equities stumbled in February, Asian ex Japan equities gained modestly, helped by continued positive momentum in Chinese tech stocks. China's tech has been the comeback story so far in 2025 after DeepSeek injected some liveliness into the market.

Vietnam is demonstrating a commitment to improving governance, expanding infrastructure and cultivating a more competitive business environment. These efforts position Vietnam to harness its demographic advantages and capitalise on emerging geopolitical opportunities.

For 30 years, policy factors like falling corporate tax and interest rates were seen to have generated a bulk of corporate profits, reducing stock-selection opportunities. There are indications that this policy-driven earnings era is coming to an end, heralding darker days for the average firm. However, firms skilled at raising profitability in core business areas could benefit, thus creating new opportunities for skilled stock pickers.