Asian markets started the week quietly as rising U.S. Treasury yields pressured equity valuations and supported the dollar near multi-month highs. Trading volumes were thin ahead of the New Year holiday, with limited data expected, including China’s PMI factory surveys on Tuesday and the U.S. ISM survey on Friday.
The MSCI Asia-Pacific index dipped 0.2% but remains 16% higher for the year. Japan’s Nikkei fell 0.9%, retaining 2024 gains of 20%. South Korea’s index edged up 0.3% but has lost 9% this year amid political uncertainty. Jeju Air shares hit record lows after a fatal plane crash.
Chinese blue chips rose 0.3%, with most of the year’s 16% gain stemming from September stimulus promises. European and U.S. futures were little changed after Wall Street’s Friday selloff, which lacked a clear catalyst.
The S&P 500 and Nasdaq are up 25% and 31% for 2024, respectively, though lofty valuations face challenges from 10-year Treasury yields near eight-month highs at 4.63%. Fed policy uncertainty could dampen 2025 earnings growth, analysts warn.
The U.S. dollar gained 6.5% this year, pressuring the euro and yen. Gold, while affected by dollar strength, is up 28% at $2,624 an ounce. Oil prices struggled on demand concerns, with Brent at $74.23 and U.S. crude at $70.61 per barrel.
Also read: Asian Stocks Wobble as Dollar Holds Steady, Investors Eye 2025
