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Shares in Australia gained 0.4%, while Japan’s Topix dropped in its first session after a multiday holiday. US contracts were little changed after the S&P 500 ended Friday up 1.3%, ending a selloff that had wiped more than a trillion dollars from the equity market.
The dollar was mixed against major currencies early Monday, while the yen gave up some of its gains from late last week to trade around 157 per dollar. 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.
Investors are showing a mixed appetite for risk after declines in the final trading sessions of last year extended into 2025. Expected monetary policy easing and optimism about artificial intelligence may continue to power gains. Still, looming US-China trade tensions risk undermining any rally. Investors also remain on watch for more stimulus measures from Beijing.
“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.”
In Asia, tech stocks will be in focus given the moves in New York trading on Friday. 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.
“We really need to see more of that clarity on Jan. 20 for markets to have greater conviction,” Laura Cooper, global investment strategist at Nuveen, said on Bloomberg Television. “US exceptionalism will continue to be the dominant theme at least in the first half of the year, regardless of what some of those policies that come through are.”
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.
West Texas Intermediate climbed, extending a rally from last week to trade around $74 per barrel. Gold was little changed at around $2640 per ounce.
