Most Asian stocks moved in a tight range on Monday as investors digested the prospect of less severe trade tariffs under U.S. President Donald Trump, while Japanese markets retreated on weak business activity readings. 

Chinese markets reversed early losses on renewed optimism over the country’s artificial intelligence capabilities, after Bloomberg reported that Jack Ma-backed Ant Group used Chinese-made chips to develop new low-cost techniques for training AI models. 

Broader regional markets kept to a tight range as investors gauged just how Trump’s trade tariffs will play out as an April 2 deadline approaches. 

Media reports over the weekend showed Trump will not impose industry-specific tariffs on April 2 as previously threatened, and will limit his plans for reciprocal tariffs to about 15 countries which he sees as having major trade imbalances with Washington. 

The report offered some relief to risk-averse markets, with Wall Street futures rising sharply in Asian trade.

But Asian markets were less enthused, given that a bulk of the 15 targeted countries lie within the region. 

Japan stocks fall after weak March PMI 

Japan’s Nikkei 225 index was flat, while the TOPIX shed 0.3% after purchasing managers index data contracted for the first time in five months in March.

Manufacturing PMI fell for a ninth straight month, while services shrank for the first time since mid-2024. 

The weak print came as local exporters grappled with easing overseas demand amid tariff-related headwinds. Broader Japanese businesses were also pressured by soft spending and dwindling domestic demand. 

The readings marked a weak end to the first quarter of 2025 for the Japanese economy, and raised some questions about just how much headroom the Bank of Japan will have to keep raising rates. 

Chinese stocks reverse early losses on AI hype 

China’s Shanghai Shenzhen CSI 300 rose 0.5%, while the Shanghai Composite index added 0.2%. Hong Kong’s Hang Seng was flat after sharply reversing early losses.

Chinese markets were nursing some losses from last week, as a rally so far in 2025- on optimism over more stimulus and Chinese AI competitiveness- gave way to some profit-taking. 

But reports on Monday could potentially reignite this rally. Bloomberg reported that Ant Group had developed less costly techniques for training AI models using locally developed chips, highlighting the country’s growing independence in chip production after it was recently blacklisted by the U.S.

Ant used chips developed by Ma’s Alibaba (HK:9988) and Huawei Technologies, and achieved results similar to those seen with chips developed by NVIDIA Corporation (NASDAQ:NVDA), the report said. 

Alibaba reversed early losses to trade up 0.5% in Hong Kong trade.

Broader Asian markets kept to a tight range. Australia’s ASX 200 moved little despite positive PMI data for March. 

Singapore’s Straits Times index was flat, while South Korea’s KOSPI moved little in anticipation of heightened political turmoil in the country, as investors awaited a court ruling on impeached President Yun Suk Yeol. 

Futures for India’s Nifty 50 index pointed to a flat open after the index marked strong gains last week.