Asian Stocks Near Record, Yen Steadies After Gains: Markets Wrap

(Bloomberg) — Asian stocks hovered near record highs and currencies steadied after a volatile session, as markets regained some stability following speculation over possible yen intervention.

The MSCI Asia Pacific Index shed initial weakness to gain 0.1%, with technology stocks such as Samsung Electronics Co. and SK Hynix Inc. among the winners. South Korea’s Kospi Index, one of the world’s best-performing benchmarks this year, rose as much as 0.8% after opening lower, following President Donald Trump’s threat to raise tariffs on the country.

The yen was little changed after two consecutive days of gains against the dollar amid speculation the US may coordinate intervention with Japan. A gauge of the greenback was steady Tuesday, hovering around levels last seen in 2022. The South Korean won was a touch weaker after four straight days of advance.

The week ahead will test market resilience, with the Federal Reserve’s rate decision and megacap technology earnings shaping expectations for the sustainability of the AI-driven rally. At the same time, renewed tariff warnings to Canada and South Korea risk reintroducing trade uncertainty just as investors assess the policy outlook.

“We don’t think the threat has a big impact,” Luca Paolini, chief strategist at Pictet Asset Management, said in a Bloomberg TV interview, referring to the potential tariffs on South Korea. “We’ve learned from the past that Trump threatens, but backs down. This seems also to be more of a tactical nature.”

The US president has ratcheted up trade tensions with several allies in recent weeks, threatening to raise duties on Canadian products to 100% if Ottawa signed a trade deal with China. Trump attributed a 25% tariff hike on South Korean goods to the country’s legislature failing to codify a trade agreement reached with the US last year.

Earlier this month, Trump had threatened to slap tariffs on European countries’ goods over his quest to seize control of Greenland. He then backed off.

“Historically, these policy shocks have created opportunities rather than lasting damage,” said Jung In Yun, chief executive officer at Fibonacci Asset Management Global. If weakness continues, I’d see it as a selective buy-the-dip moment, not a reason to step aside.”

Meanwhile, the yen’s gains remained in focus after comments from Japanese officials fueled speculation that the government may intervene in the market to prevent the currency from resuming its slide. To some, however, the recent rally has partly neutralized the likelihood of intervention.

“The dramatic recovery in the yen suggests that actual intervention is not needed,” said Marc Chandler at Bannockburn Capital Markets.

In other corners of the market, gold and silver traded near their record highs on Tuesday. Oil steadied.

Treasuries remained in a narrow range on Monday with the Federal Reserve expected to pause its rate cuts when it announces its policy on Wednesday.

Fed officials are expected to hold rates steady following three straight cuts at the end of 2025, as a steadier jobs market restores a degree of consensus at the central bank after months of growing division. Chair Jerome Powell is likely to telegraph his view that policy is well-positioned for now, but refrain from signaling much about where rates are headed.

Expectations about Fed policy have been shifting in response to changes in the consensus view on whom Trump will nominate to succeed Powell, whose term expires in May.

“Even though the Fed isn’t expected to cut interest rates, Powell’s press conference may be as much about Fed independence as it is policy,” said Chris Larkin at E*Trade from Morgan Stanley.

Corporate Highlights:

Morgan Stanley plans to step up ties with Mitsubishi UFJ Financial Group Inc. to get more market share across all of its businesses in Japan, the US bank’s local chief said. A Zijin Mining Group Co. subsidiary agreed to buy Allied Gold Corp., which owns gold mines in Africa, for C$5.5 billion ($4 billion) in the latest step in the Chinese company’s rapid growth. The split between Pirelli & C. SpA’s two biggest investors widened when a proposal by China’s Sinochem Group aimed at addressing the tire maker’s US regulatory risks was rejected by its top Italian owner. Some of the main moves in markets:

Stocks

S&P 500 futures were little changed as of 10:47 a.m. Tokyo time Japan’s Topix was little changed Australia’s S&P/ASX 200 rose 1% Hong Kong’s Hang Seng rose 0.6% The Shanghai Composite fell 0.3% Euro Stoxx 50 futures were little changed Currencies

The Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1877 The Japanese yen was little changed at 154.30 per dollar The offshore yuan was little changed at 6.9549 per dollar Cryptocurrencies

Bitcoin rose 0.6% to $88,511.18 Ether rose 0.2% to $2,932.19 Bonds

The yield on 10-year Treasuries advanced one basis point to 4.23% Japan’s 10-year yield advanced 4.5 basis points to 2.280% Australia’s 10-year yield advanced two basis points to 4.84% Commodities

West Texas Intermediate crude fell 0.5% to $60.33 a barrel Spot gold rose 1% to $5,061.20 an ounce This story was produced with the assistance of Bloomberg Automation.

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