investingLive Asia-Pacific FX news wrap: Tariff uncertainty persists, China rises

At a glance:

• Fresh Section 232 tariff talk adds marginal trade uncertainty

• Confusion lingers over Trump’s 15% flat tariff vs 10% regulation level

• PBOC holds LPRs steady at 3.0% (1Y) and 3.5% (5Y)

• China adds 20 Japanese firms to dual-use export watch list

• Apple to shift some Mac Mini production to Houston

• FedEx sues over Trump-era tariffs

• Onshore yuan hits strongest level in nearly three years

• Chinese equities rally; USD slightly firmer; gold slips below 5200

There was no shortage of headlines during the session, though market impact varied.

Trade uncertainty ticked higher after reports that President Trump is considering expanded, sector-specific Section 232 tariffs. While the proposals add another layer of policy ambiguity, the broader trade framework remains fluid and the immediate market impact appears marginal for now. Confusion also persists around the administration’s touted 15% flat tariff, with reports suggesting regulations still reflect a 10% level.

Japan is reportedly seeking assurances that the new tariff regime currently being drafted will not prove more punitive than existing arrangements, with other trading partners pursuing similar clarifications.

In China, the People’s Bank of China left its one-year and five-year Loan Prime Rates unchanged at 3.0% and 3.5%, respectively. The steady policy stance underscores Beijing’s cautious balancing act between supporting growth and maintaining currency stability amid strengthening pressure.

Meanwhile, China’s Commerce Ministry added 20 Japanese entities to an export control watch list, banning exports of dual-use items without licences, a move that adds to ongoing Japan–China tensions.

Corporate headlines included Apple confirming it will move some Mac Mini production to Houston from Asia, part of a broader supply-chain diversification push. Separately, FedEx filed suit in the U.S. Court of International Trade seeking refunds for tariffs it argues were imposed illegally.

In FX, China’s onshore yuan climbed to its strongest level against the dollar in nearly three years as traders returned from a nine-day holiday. The move was supported by renewed dollar softness and expectations that the U.S. Supreme Court’s tariff ruling could ease export pressures. Strong Q4 current account data also pointed to solid FX inflows.

Chinese equities rose on the improved trade tone. The yen was volatile, with USD/JPY briefly reclaiming 155.00 before slipping back below that level. The broader dollar was slightly firmer overall.

Gold eased back under 5200, consolidating after recent strength.