Asian stocks largely decline as the yen strengthens versus the U.S. dollar

Asian Markets Mostly Lower as Yen Strengthens

Asian stock markets largely moved downward on Monday, with Japan's main index seeing a significant drop following a sharp appreciation of the yen against the U.S. dollar.

The Nikkei 225 in Tokyo fell by 1.9% to close at 52,812.45, as major exporters such as Toyota Motor Corp. experienced notable declines—Toyota's shares slipped by 3.2%.

Typically, a weaker yen benefits Japanese exporters by boosting the value of their overseas profits. While the dollar had been strengthening against the yen in recent months, it dropped sharply in recent days after officials from both Japan and the U.S. signaled readiness to intervene in currency markets to support the yen.

The dollar was last trading at 154.26 yen, down from 155.01 yen, after having reached around 158 yen the previous week.

Meanwhile, the euro strengthened slightly to $1.1866 from $1.1858.

Regional Market Performance

• South Korea’s Kospi slipped 0.6% to 4,961.58.
• Hong Kong’s Hang Seng edged down 0.1% to 26,722.89.
• The Shanghai Composite inched up 0.1% to 4,141.10.

Markets in Australia, New Zealand, India, and Indonesia were closed for the day.

U.S. Market and Trade Developments

U.S. stock futures declined slightly amid ongoing uncertainty regarding American tariff policies and other economic concerns.

• Futures for both the S&P 500 and the Dow Jones Industrial Average were down by 0.3%.

President Donald Trump’s threat to impose a 100% tariff on Canadian goods was met with a response from Canadian Prime Minister Mark Carney, who stated that Canada had no intention of pursuing a free trade agreement with China, which had been a trigger for Trump’s warning of higher tariffs.

In 2024, Canada matched U.S. tariffs by placing a 100% duty on electric vehicles from China and a 25% tariff on steel and aluminum imports. China responded with 100% tariffs on Canadian canola oil and meal, and 25% on pork and seafood.

During a recent visit to China, Carney diverged from U.S. policy by reducing Canada’s 100% tariff on Chinese electric vehicles in exchange for China lowering tariffs on Canadian products.

Recent U.S. Market Movements

• The S&P 500 edged up by less than 0.1% to 6,915.61 on Friday, though it recorded a modest weekly loss for the second week in a row.
• The Dow Jones Industrial Average slipped 0.6% to 49,098.71.
• The Nasdaq composite gained 0.3% to 23,501.24.

Most stocks on Wall Street declined, with Intel dragging the market lower after its shares plunged 17%.

Looking Ahead: Federal Reserve Decision

The U.S. Federal Reserve’s next opportunity to adjust its key short-term interest rate comes on Wednesday, though markets widely anticipate no change.

Commodities Update

• Early Monday, U.S. benchmark crude oil rose by 2 cents to $61.09 per barrel.
• Brent crude, the global benchmark, increased by 3 cents to $65.10 per barrel.

Gold prices climbed 2% to nearly $5,100 an ounce, while silver surged 6.4% to about $108 per ounce. The recent rally in precious metals reflects investors’ search for safer investment options amid market volatility.