(Updates after Chinese markets open)

By Kevin Buckland and Ankur Banerjee

TOKYO, Nov 26 (Reuters) - The dollar rallied sharply on

Tuesday after U.S. President-elect Donald Trump pledged tariffs

on all imports from Canada and Mexico, and additional tariffs on

China.

Stocks declined, giving back some of the robust gains of the

previous session, when they were buoyed by the nomination of

fund manager Scott Bessent as Treasury Secretary, considered by

investors as a voice for Wall Street in Washington.

Bessent's appointment had also led to a sharp fall in U.S.

yields as investors scooped up Treasury bonds, sending the

dollar sliding in the previous session.

"It's almost as if Trump wants to remind markets who is in

control, after nominating Scott Bessent as Treasury Sec - a man

markets expected to cool Trump's potency," said Matt Simpson,

senior market analyst at City Index.

"With the Canadian dollar rising against the Mexican peso,

markets are assuming this will hit Mexico the hardest."

The dollar jumped 1.6% to 20.6000 Mexican pesos as of

0213 GMT on Tuesday, and climbed 1% to C$1.4132.

It strengthened 0.2% to 7.2628 yuan in offshore trading

, after earlier reaching the highest since late July at

7.2730 yuan.

Australia's risk-sensitive dollar - which also

tends to reflect the outlook for top trading partner China -

slumped 0.5% to $0.6474, after earlier dipping to $0.64335 for

the first time since Aug. 5.

"It was just last month that Trump said that 'the most

beautiful word in the dictionary is tariff', so there really

should not have been a surprise in Trump's intention, just in

the timing of the comments," said Sean Callow, a senior FX

analyst at ITC Markets.

"The fall in trade-sensitive currencies makes sense, and

should persist near term."

Japan's Nikkei dropped 1.2%, giving back most of

Monday's gains, as investors contemplated the risks of tariffs

on the nation's many heavyweight exports, particularly

automakers. Toyota ( TM ) slid 2% and Nissan ( NSANF ) tumbled

4%.

Australia's stock benchmark eased 0.46%, a day after

rising to a record high. Taiwan's share index lost 0.8%.

However, Hong Kong's Hang Seng added 0.6%, and

mainland blue chips rose 0.2%, reversing earlier

declines.

Trump said that on his first day in office he would impose a

25% tariff on all products from Mexico and Canada, and an

additional 10% tariff on goods from China, citing concerns over

illegal immigration and the trade of illicit drugs.

Trump has previously pledged to end China's

most-favored-nation trading status and slap tariffs on Chinese

imports in excess of 60%.

"It's definitely a shock to the market and weighing on

Chinese assets, especially the export sectors," said Gary Ng,

senior economist at Natixis.

"But compared to what he imposed on Canada and Mexico,

the magnitude (of the Chinese tariff) is not that big, so

investors might still want to see what are the follow ups and

when/if the 60% promised will actually come through."

U.S. S&P 500 futures pointed 0.1% lower following a

0.3% gain in the cash index overnight.

Pan-European STOXX 50 futures dropped 1%.

The euro slipped 0.4% to $1.0459. Sterling

lost 0.34% to $1.2527.

At the same time, the dollar edged down 0.1% to 154.04

yen, after initially strengthening following Trump's

tariff remarks.

The dollar-yen pair tends to track long-term U.S.

Treasury yields, which ticked up about 2 basis

points to 4.2809% in Tokyo, but following a 15 basis-point slide

on Monday.

Gold succumbed to the dollar's strength, dipping to a

one-week low of $2,604.99.

Bitcoin rose 1% to $94,610, finding its feet

following a pullback from last week's record high at $99,830.

The token has benefited from speculation of an easier regulatory

environment for cryptocurrencies under Trump.

Oil prices extended declines from the previous session as

investors took stock of a potential ceasefire between Israel and

Hezbollah.

Brent crude futures fell 0.38% to $72.73 a

barrel, while U.S. West Texas Intermediate crude futures

were at $68.62 a barrel, down 0.46%. Both benchmarks settled

down $2 per barrel on Monday.