Asian markets reverse early losses as Trump agrees NAFTA talks

Hong Kong: Most Asian markets reversed earlier losses on Thursday as the US said it would renegotiate its free-trade deal with Canada and Mexico, soothing fears of a trade war after reports said President Donald Trump was considering leaving the pact.
Equities across the region started the day in the red following four days of gains and as traders assess the chances of Congress passing massive tax cuts unveiled on Wednesday.
The White House said all three countries would revise the 22-year-old North American Free Trade Agreement (NAFTA) swiftly.
The news fuelled relief on trading floors as the tycoon has previously hit out at the agreement — calling it a “disaster” that has killed American jobs — as well as other deals the US has signed globally.
Jitters about a possible trade war were heightened this week when Washington slapped 20 per cent tariffs on Canadian softwood lumber imports.
“It is my privilege to bring Nafta up to date through renegotiation,” Trump said in a White House statement. “I believe that the end result will make all three countries stronger and better.”
The Mexican peso and Canadian dollar bounced back from early selling after the NAFTA announcement.
On equity markets Tokyo ended the day 0.2 per cent lower after a four-day rally, with dealers unmoved by the Bank of Japan’s decision to lower its inflation target and stand pat on its monetary easing programme. Its head later warned of another “likely” delay to achieving its two per cent target.
Airbag maker Takata plunged 20 per cent after a report said it was considering filing for bankruptcy protection and then rolling its key businesses into a new company.
But Hong Kong climbed 0.5 per cent for a sixth-straight gain, while Sydney added 0.2 per cent, and Singapore and Seoul each put on 0.1 per cent.
Shanghai ended 0.4 per cent higher and Wellington was up 0.3 per cent.
In early European trade London fell 0.4 per cent, while Frankfurt and Paris each slipped 0.3 per cent.
The White House unveiled plans to slash corporate and individual rates on Wednesday but there were few details and several questions over how the measures will be paid for.
The proposals are part of a wide-ranging plan to fire the world’s top economy, which also includes ramping up infrastructure spending and wiping away business regulations. “Under the Trump plan, we will have a massive tax cut for businesses and massive tax reform and simplification,” US Treasury Secretary Steven Mnuchin said at the White House.
The dollar only held its gains against the Japanese yen on Thursday after US President Donald Trump’s tax plan offered no surprises, slowing the greenback’s rally.
The US dollar had surged to a four-week high of 111.780 yen on Wednesday before Trump’s tax reform plans were unveiled. But it lost traction as the proposals failed to excite investors. The dollar was last up 0.2 per cent at 111.20 yen . — AFP