Asian Markets Steady After Trump’s Greenland Tariff Threats Shake Global Confidence

Gold and silver hit record highs as investors seek safety ahead of Trump’s Davos appearance

Asian stock markets found some stability on Wednesday following a turbulent start to the week sparked by renewed trade tensions tied to former US President Donald Trump’s remarks on Greenland. While the initial shock sent global markets lower, investors appeared more cautious as they weighed the risk of a broader escalation between the United States and Europe.

The latest volatility was triggered over the weekend when Trump threatened to impose tariffs of up to 25 percent on several European nations including France, Germany, Britain, and Denmark, accusing them of blocking his ambitions related to Greenland. The comments reignited fears of a fresh transatlantic trade dispute.

European leaders reacted swiftly. French President Emmanuel Macron warned that Paris could activate a powerful but rarely used economic defence tool aimed at countering coercive trade measures. European Commission President Ursula von der Leyen, speaking at the World Economic Forum in Davos, cautioned Washington that targeting allied countries with punitive tariffs would be a “mistake”.

US Treasury Secretary Scott Bessent pushed back on Monday, warning that any retaliatory tariffs from the European Union would be “unwise”, further underlining the fragile state of negotiations.

Global equities have been under pressure all week, with Wall Street suffering sharp losses on Tuesday as US markets reopened after a long holiday weekend. Asia’s performance on Wednesday was mixed: markets in Tokyo, Sydney, Singapore, Taipei, and Manila slipped, while Hong Kong, Shanghai, and Jakarta posted gains. US futures pointed higher, suggesting a tentative rebound.

Investor unease continued to fuel demand for traditional safe-haven assets. Precious metals surged to new record levels, with gold climbing to $4,836.80 an ounce and silver reaching $95.89, reflecting heightened concern over geopolitical and trade-related risks.

Attention is now firmly on Trump’s scheduled appearance at the World Economic Forum later Wednesday, which traders believe could further influence market sentiment.

“Markets are closely watching the evolving situation around Trump’s Greenland claims, the risk of new tariffs on European imports, and the likelihood of a strong response from Europe,” said Chris Weston, head of research at Pepperstone. “The tone of Trump’s Davos speech will be critical for short-term price action.”

Bond markets also showed signs of easing after dramatic moves in Japan earlier in the week. Japanese government bond yields had surged to record highs on Tuesday following Prime Minister Sanae Takaichi’s announcement of a snap election for February 8 and a pledge to suspend the country’s eight percent sales tax on food and beverages for two years if re-elected.

The announcement sent 40-year bond yields jumping by more than a quarter of a percentage point — the largest single-day rise since Trump’s “Liberation Day” tariff announcement in April. The spike prompted US Treasury Secretary Scott Bessent to hold talks with Japan’s Finance Minister Satsuki Katayama amid concerns about spillover effects on global yields.

Calmer sentiment returned on Wednesday after Katayama urged markets to “remain calm”, pointing to improving tax revenues and Japan’s lowest reliance on debt issuance in three decades. Yields retreated modestly, though analysts warned the relief may be temporary.

“Official comments can slow market momentum, but they rarely reverse it entirely,” said Katsutoshi Inadome of Sumitomo Mitsui Trust Asset Management. “Bond buying may continue in the short term, but the upward pressure on yields is unlikely to disappear quickly.”

Market Snapshot (around 0230 GMT)