Feb 4 (Reuters) - A look at the day ahead in Asian

markets.

First the stick, then the carrot.

Investors breathed a sigh of relief on Monday after some of

U.S. President Donald Trump's sweeping tariffs announced over

the weekend were put on ice, allowing stocks and non-dollar

currencies to claw back losses and regain some poise.

This should help bring some degree of calm to markets in

Asia on Tuesday, assuming there is no left-field announcement

from Trump in the next few hours. Given the events of the few

days though, that may be a risky assumption.

The steep fall across Asian markets on Monday was

understandable after Trump on Saturday slapped 25% import

tariffs on goods from Mexico, the same levy on non-energy

imports from Canada and 10% duties on purchases from China.

U.S. markets were then whiplashed later in the day after

Trump and Mexican President Claudia Sheinbaum said the Mexican

tariffs would be put on hold for a month while talks between the

two countries towards a "deal" got underway.

There's unlikely to be any official reaction from Beijing to

the unilateral tariffs before Wednesday, when China reopens

after the Lunar New Year holiday. China's U.N. envoy Fu Cong did

say on Monday, however, that China could be forced into taking

counter measures.

One option many observers say Beijing may pursue is allowing

its currency to fall significantly, which would offset the

tariffs. Pressure on the yuan could be pretty intense when

trading reopens later this week - the offshore yuan traded in

Hong Kong hit a record low against the dollar on Monday before

clawing back some of these losses.

Asian stocks got beaten down pretty badly on Monday. The

MSCI Asia ex-Japan index, the Nikkei 225 and other major

benchmark indices posted their biggest declines in several

months, but Japanese futures are pointing to a rebound of more

than 1% on Tuesday.

For what it's worth, market expectations for U.S. interest

rates this year have not budged much at all. Investors still

expect two more quarter-point cuts, the first coming in July

rather than June.

U.S. Treasury yields fell on Monday, surprising some

analysts who would have expected the opposite reaction due to

the expected inflationary impact of tariffs. A lower dollar and

U.S. bond yields should bode well for Asia on Tuesday.

Markets in Asia could get some direction from Japan, where

the corporate reporting season is underway. The list of

companies releasing results on Tuesday include heavyweights

Panasonic, Nintendo, Mitsui, Mitsubishi UFJ and Sumitomo.

Here are key developments that could provide more direction

to markets on Tuesday:

- U.S. tariff fallout

- Japan corporate earnings

- Offshore Chinese stocks, yuan trading in Hong Kong

(By Jamie McGeever

)