ForexLive Asia-Pacific FX news wrap: US assets smashed on tariff, financial stability fear

• Tesla has launched new ‘Long Range’ Cybertruck in the US @ $69990USD
• PBOC, BoJ and BoK met to discuss the impact of Trump tariffs on the global economy
• US dollar, bonds, equities have all been smashed in Asia morning trade – recap (so far)
• PBOC sets USD/ CNY reference rate for today at 7.2087 (vs. estimate at 7.3104)
• US troops will be allowed to operate from several Panama-control sites along Panama Canal
• Record high price for gold US$3206+
• Revisiting the January call for a lower US dollar
• Japan fin min Kato says excess FX volatility negatively impacts the economy
• Further hints of efforts to boost consumption in China – from Prime Minister Li Qiang
• Trump is threatening Mexico with more tariffs
• Japan’s government is considering cutting food consumption tax
• New Zealand manufacturing PMI for March 53.2 (prior 53.9)
• US retailer Five Below has compelty halted its business with China
• “The next chapter of U.S.-China decoupling has begun. The pain will be felt everywhere. “
• EU leaders plan to travel to China for a meeting with Chinese President Xi in July
• More from Fed’s Collins: Financial markets are performing well and remain liquid
• EU and China have begun negotiations on abolition of EU tariffs on Chinese electric cars
• In Q1 2025 large US companies filed bankruptcy at the fastest rate in 15 years
• Trump has sidelined some of his advisers – poor performers Lutnick & Navarro on the outer
• Forexlive Americas FX news wrap 10 Apr: DXY has it worst day since November 2022
• Fed’s Collins says interest rate policy to hold steady for now
• Navarro says going to get trade deals with Australia, India and the UK
• EU Commissioner President Von De Leyen says could tax big tech if Trump trade talks fail
• US equity close: Bad, but not as bad as it could have been
• Trade ideas thread – Friday, 11 April, insightful charts, technical analysis, ideas

Fears over the economic fallout from Trump’s tariffs intensified during the Asian session, compounded by fresh concerns over financial stability. A widely circulated Bloomberg piece — shared heavily across social media — raised questions about the Federal Reserve’s independence, further spooking markets:

The spectre of an over-leveraged basis trade added to the pressure, triggering heavy selling of both the US dollar and US assets. The reaction was swift and stark:

• US 10-year yields surged to 4.48%, marking the largest weekly jump since 2001

• US 30-year yields hit 4.95%, the biggest weekly gain since 1982

• The yield curve steepened to levels not seen since February 2022

Liquidity was thin, which only amplified the sharp moves.

As for FX, the USD index, DXT, dropped under 100 for the first time since July 2023:

• USD/JPY took a look under 143.00
• EUR/USD hit highs above 1.1350
• CHF and GBP also rose
• AUD and NZD gained a little, as did CAD

Meanwhile, Chinese equities broke a three-day winning streak after the US revealed its China tariffs now total a staggering 145%, rekindling investor anxiety over trade tensions.

This article was written by Eamonn Sheridan at www.forexlive.com.