TOKYO (AP) — Asian stock markets experienced a downward trend on Monday, with Japan's Nikkei 225 index suffering a significant decline due to a sharp increase in the yen value against the U.S. dollar. The benchmark fell 1.9% to 52,812.45, adversely affecting major exporters such as Toyota Motor Corp., where shares dropped by 3.2%. This decline is noteworthy as a weaker currency typically benefits Japanese exporters by enhancing the value of their foreign earnings.
In recent weeks, the U.S. dollar had been appreciating against the yen, but it has seen a steep decline in the past few days following signals from Japanese and U.S. officials of potential intervention to stabilize the yen. The dollar fell to 154.26 yen, down from 155.01 yen, having traded around 158 yen just the previous week. Meanwhile, the euro gained slightly, rising to $1.1866 from $1.1858.
Other Asian markets also exhibited mixed performances. In South Korea, the Kospi index fell by 0.6%, closing at 4,961.58. In Hong Kong, the Hang Seng index shifted down by 0.1% to 26,722.89, while China's Shanghai Composite saw a slight increase, rising 0.1% to 4,141.10. Notably, markets in Australia, New Zealand, India, and Indonesia remained closed.
In the United States, futures indicated a downward trend as uncertainty persisted regarding tariff policies. Specifically, futures for the S&P 500 and the Dow Jones Industrial Average declined by 0.3%. This drop followed a turbulent week where concerns mounted over a potential 100% tariff on Canadian goods, as threatened by President Donald Trump. Canadian Prime Minister Mark Carney refuted these claims, asserting that Canada had no intention of pursuing a free trade deal with China that would invoke such tariffs.
Additionally, tensions escalated after Canada mirrored U.S. actions, imposing a 100% tariff on electric vehicles from China, alongside a 25% tariff on steel and aluminum imports. In response, China retaliated with steep import taxes on Canadian agricultural and meat products. However, during a recent visit to China, Prime Minister Carney negotiated a reduction in Canada's 100% tariff on Chinese electric vehicles in exchange for lower tariffs on Canadian goods.
On the equity markets last week, the S&P 500 managed a marginal gain of less than 0.1%, closing at 6,915.61, but marked a modest loss over the week. The Dow Jones Industrial Average fell by 0.6% to 49,098.71, while the Nasdaq composite rose 0.3% to 23,501.24. The majority of stocks on Wall Street faced losses, substantial losses were observed in Intel, which dropped by 17%, heavily impacting the market.
Upcoming discussions from the U.S. Federal Reserve regarding short-term interest rates are anticipated on Wednesday, with market expectations leaning towards stability in rates without alteration.
In commodity markets, benchmark U.S. crude oil prices saw a slight rise of 2 cents to $61.09 per barrel, while Brent crude, the international standard, increased by 3 cents to $65.10 per barrel. Precious metals' values surged, with gold increasing by 2% to nearly $5,100 an ounce and silver rising sharply by 6.4% to approximately $108 per ounce. This trend reflects investors' growing preference for safer investments amid market volatility.
