How Trump’s Venezuela gamble is making Asian stocks great again

TOKYO — As the globe puzzles over US President Donald Trump’s sudden pivot toward regime change and plunder, investors can’t seem to get enough of Asia.

This region’s equity bourses are enjoying their best-ever start to a year, as evidenced by the 4% jump in the MSCI Asia Pacific Index so far in 2026. Local foreign exchange gushes are registering the best start to a year since at least 2023. Tech-centric bourses in South Korea and Taiwan are hitting new record highs.

Though this latter dynamic also reflects the global artificial intelligence trade, it doesn’t detract from the point that Trump’s geopolitical adventurism in Venezuela — and perhaps elsewhere — is making Asian assets great again.

US stocks are up, too, throwing some cold water on a revival of the “sell America” trade. Yet there’s clearly a renewed impetus for investors to find opportunities outside the US economy, which is about to go through some things.

Among those things it’s about to go through are a slowing jobs market and stubbornly high inflation at a moment when the Federal Reserve is cutting rates. Another: a national debt careening toward the US$39 trillion mark. This is equivalent to the combined annual gross domestic product of China, Germany and Japan at a moment when the US is in the midst of an “impending population collapse” as immigration policies turn inwards.

“US exceptionalism has peaked and is starting to unwind,” Raymond Sagayam, managing partner at Banque Pictet & Cie SA, tells Bloomberg. Asia, he notes, is chief among the regions winning capital that’s avoiding an increasingly chaotic US financial system.

One big wild card is what Trump World might do next. Hints that everywhere from Colombia to Mexico to Greenland could be next have global risk analysts scrambling for clarity. The same goes for how Trump’s capture of Venezuelan President Nicolas Maduro might affect China’s designs on Taiwan or Russia’s following plans for Ukraine and beyond.

The fact that Taiwan shares are surging suggests many investors are more focused on AI riches than geopolitical fallout. Shares in Taiwan Semiconductor Manufacturing Co. are surging in sync with those of Samsung Electronics Co. and other Asian semiconductor giants at the forefront of AI chip development.

Asia’s most tech-centric bourses are powering higher — and higher. No hopes the Fed will continue cutting rates in the months ahead, while the Bank of Korea, People’s Bank of China and the Bank of Japan will be holding interest rates steady — and lower in some cases.

Yet the avoid-America trade raises touchy questions about where global markets are heading.

Following events in Venezuela, gold prices rose sharply, reaching new highs above $4,480 per ounce. “This is a considerable rise, given that prices had fallen to levels of just above $4,300 per ounce last week,” says Peter Kinsella, global strategist at Union Bancaire Privée.

The upward move, Kinsella notes, “is a stark reminder that gold continues to benefit from an underlying theme of geopolitical tensions – and the lesson is that it can rise at any time, or when least expected.”

It follows that investors may believe the Venezuela issue is isolated. “However, this is unlikely to be the case,” Kinsella says. “There are several other regimes where the major powers have contested interests – Cuba and Iran for example — and the upshot of this is that gold will continue to offer a superb hedge on current and future geopolitical tensions.”

Eurasia Group CEO Ian Bremmer adds that “2026 is already shaping up to be a pivotal year. The capture of Maduro just three days in has underscored how much uncertainty the United States can generate on the global stage. But other threats loom large – from confrontations between Russia and NATO, artificial intelligence companies’ race to generate revenue, to intensifying fights over water, and more.”

Naturally, events in Venezuela have essential implications for the oil market. Increasing US control of Venezuelan oil exports, Kinsella adds, implies that Venezuela’s current export markets may need to find alternative sources of supply in the medium term. This is particularly relevant for both Cuba and China.

The China piece could be especially volatile, given the $100 billion-plus in loans the Chinese have extended to rebuild Venezuelan refineries and infrastructure. From 2000 to 2023, Venezuela was the fourth-largest recipient of loan commitments from Chinese official lenders, according to AidData. Is Chinese leader Xi Jinping just going to walk away and let the US “run” the country as Trump says?

To strategist Peter Tchir at Academy Securities, an investment bank owned and operated by veterans, “the real wild card” is China’s response. Does it renew bans on rare-earth minerals? Dump its US$689 billion of US Treasuries? Tell Trump the “grand bargain” trade deal his White House desperately needs is kaput?

Longtime China watcher Bill Bishop, who writes the Sinocism newsletter, argues that the Maduro drama “looks to have been a massive PRC intelligence and analytical failure.” Chinese special envoy Qiu Xiaoqi “met with Maduro in Caracas just hours before the raid, and may have still been in the country when it occurred. And as with Syria, the value of any sort of partnership with China does not extend to political security.”

China, Bishop says, is not hugely reliant on Venezuelan oil; the country accounts for a low single-digit percentage of the mainland’s oil imports. So, if the US rebuilds the oil industry and increases output, he notes, China can still buy it if it desires.

But “the propaganda value of the US flouting international law in such a high-profile way against a Global South country may be priceless, and the action fits perfectly with how the PRC talks about the US as a hegemonic, imperialist and destabilizing force in the world,” Bishop concludes.

The US debt angle here has the bond markets on edge. This year, global investors learned that, at times, Trump is willing to stomach significant stock losses. But not telltale signs of distress in the bond market.

Posterity will show that it wasn’t the US Congress, the judiciary or voters who forced the US president into a somewhat more rational economic and tariff policy. It was bond traders. That happened after the so-called “bond vigilantes” pushed long-term Treasury yields for a time toward 5%. That — and memories of events from the mid-1990s, the mid-2000s and the Silicon Valley Bank debacle in 2023 — led Trump to beat a hasty and rare retreat on most tariffs.

Yet it’s concerns about the next round of vigilantes to take on the Trump White House that made him blink: Asian central banks.

Central banks in this region hold nearly US$3 trillion of Treasuries, with Japan and China, the top holders, sitting on a combined US$1.9 trillion. If they were to stop buying, who could pick up the slack? Arguably no one.

That’s why chatter in bond trading pits to the effect that, say, China and other Asian monetary authorities might stop buying – or actively sell – dollars alarms top Treasury officials. The years Treasury Secretary Scott Bessent spent working in hedge fund circles could come in handy. For all Trump’s public bluster, Bessent knows another Long-Term Capital Management-like crash could be catastrophic for global markets.

LTCM’s 1998 collapse was partly due to surging Treasury debt yields. Triggering a repeat in 2026, with Trump’s tariffs upending all asset classes and China flirting with deflation, could make the 2008 Lehman Brothers crisis look tame by comparison. Now, add the US returning to regime-change tactics to the mix.

The risk that Trump’s policies might repel Asia is growing. This threat gives Xi in Beijing a unique lever to remind Trump that his gamble in Venezuela could come with high costs.