Tariff Uncertainty Drives Market Caution, Investors Seek Safe Havens

Analysts have expressed concerns over the persistent uncertainty surrounding tariffs, highlighting it as a significant risk to the market. The lack of clear information on tariff policies, particularly those expected to be announced, is contributing to the market's uncertainty. This prolonged ambiguity could delay any signals of market recovery, as investors remain cautious about the potential impact on various sectors.

According to a special wealth manager, the risk lies in the prolonged lack of clear information, which could delay any market recovery signals. The manager noted that the anticipated announcements on tariffs are unlikely to provide all the necessary details, leaving other unknown factors such as potential retaliatory measures from trading partners and the impact on inflation and interest rates. The manager also pointed out the difficulty in preparing for these uncertainties, especially for industries heavily reliant on global supply chains. The manager suggested that investors might want to focus on companies that are more domestically oriented and less dependent on global supply chains, as well as the service sector, which remains another unknown factor.

The market's current situation is reminiscent of the conditions in late 2018, where policy uncertainty led to a significant sell-off. If economic data, such as employment figures, continue to be weak, cyclical sectors could face additional downward pressure. The potential for retaliatory measures from other regions further exacerbates market concerns, as investors seek safe-haven assets like the Japanese yen and gold as a hedge against the growing uncertainty. The yen, in particular, has seen increased demand as investors brace for potential economic downturns and the impact of tariffs on global markets.

Analysts also note that the Japanese market, which has not fully priced in the tariff risks, could see further declines if the "reciprocal tariff" policies are implemented. The overall market sentiment remains cautious, with analysts warning that the current economic data and policy uncertainties could lead to a prolonged period of market volatility. The potential for further tariff announcements and retaliatory actions from other regions adds to the market's unease, as investors continue to navigate the complex landscape of global trade policies.