Asian currencies hit two-decade low, stocks mixed

The up-and-down action in Asian stocks suggests investors are wary of taking on more risk in light of looming US-China trade tensions

A gauge of Asian currencies hit its lowest in almost two decades against the dollar and equities fluctuated as investors parsed a bumpy period of holiday-thinned trading.

Japan’s Topix dropped in its first session after a multiday holiday, though shares in Korea and Australia gained. US contracts also slipped.

Japan’s yen led declines among Group-of-10 currencies against the greenback, while the Australian and New Zealand dollars were the standout performers. The daily fixing for China’s currency is in the spotlight after the onshore yuan breached a key milestone for the first time since late 2023.

The up-and-down action in Asian stocks suggests investors are wary of taking on more risk in light of looming US-China trade tensions. While monetary policy easing, stimulus from Beijing to stoke domestic demand and optimism about artificial intelligence stand to power gains, tariffs could stymie momentum.

“We expect policymakers to cut interest rates across the vast majority of Asian economies in 2025,” Goldman Sachs Group Inc. analysts including Andrew Tilton wrote in a note. “The key exception will remain Japan, where we expect reflation to be sustained this year and rate hikes to continue.”

Tech stocks will be in focus. Taiwan-listed Hon Hai Precision Industry Co., the assembly partner to Nvidia Corp. and Apple Inc. that’s also known as Foxconn, reported better-than-expected revenue over the weekend. The results are a sign that demand for AI infrastructure remains robust.

Data due Monday includes China Caixin services and composite PMI, Thai inflation and industrial production for Vietnam. Elsewhere, Israel’s central bank will hand down an interest rate decision, while data for release includes German inflation and US factory orders.

In South Korea, a court dismissed an appeal by lawyers of Yoon Suk Yeol against an arrest warrant for the impeached president, according to a local media report Sunday.

Fed Comments

In the US, Federal Reserve Governor Lisa Cook will speak at a conference on law and microeconomics at the University of Michigan. Her colleague Tom Barkin, the Richmond Fed President, suggested on Friday his preference was to keep rates restrictive for longer.

The comments, and data showing the US economy remains strong, underscore the challenge investors face in deciphering the path ahead for US interest rates after Fed Chair Jerome Powell’s hawkish pivot in December.

Investors are also contemplating Donald Trump’s return to the White House in two weeks.

Elsewhere, President Joe Biden is set to order a ban on new offshore oil and gas development across some 625 million acres of US coastal territory, ruling out the sale of drilling rights in Atlantic and Pacific waters as well as the eastern Gulf of Mexico.

WTI crude rose for a sixth day, its longest such streak since April, while gold also advanced.