HONG KONG, Jan 6, (V7N) – Asian markets began the first full week of 2025 with modest gains, reflecting cautious optimism as traders digested a strong Wall Street performance while bracing for geopolitical and economic uncertainties.

Hong Kong, Shanghai, Sydney, Singapore, Manila, Taipei, Wellington, and Jakarta all saw slight increases, while Seoul surged over 1%. However, Tokyo's Nikkei 225 dropped 1.3%, dragged down by Nippon Steel's losses following US President Joe Biden's decision to block its $14.9 billion bid for US Steel on national security grounds.

The upcoming inauguration of Donald Trump on January 20 is adding tension, particularly amid expectations of renewed trade friction with China. Trump's warnings of hefty tariffs and deregulation have raised concerns over inflation but offer potential upside for corporate profits.

"2025 is shaping up to be a year of greater uncertainty, especially with Trump's trade policies," said Kai Wang, Asia equity strategist at Morningstar.

Fed Policy and Economic Signals

Investors are also closely watching the US Federal Reserve after Richmond Fed President Tom Barkin signaled support for maintaining high interest rates to counter inflation risks.

US jobs data, expected later this week, could provide critical insights into the Fed's policy trajectory, with markets now tempering expectations of multiple rate cuts.

China's Economic Balancing Act

Meanwhile, Beijing continues to roll out stimulus measures to reignite growth, focusing on consumption and the struggling property sector. However, analysts warn that escalating trade tensions with Trump could dampen these efforts.

"China faces the dual challenge of higher tariffs and a domestic confidence crisis," Moody's Analytics noted. "Major stimulus announcements are expected in March during the Two Sessions meetings."

  • Tokyo - Nikkei 225: DOWN 1.3% at 39,394.27
  • Hong Kong - Hang Seng Index: UP 0.3% at 19,809.68
  • Shanghai - Composite: UP 0.1% at 3,215.50
  • Euro/dollar: UP at $1.0308 from $1.0307
  • Pound/dollar: UP at $1.2432 from $1.2425
  • Dollar/yen: UP at 157.60 yen from 157.33 yen
  • Euro/pound: DOWN at 82.90 pence from 82.95 pence
  • West Texas Intermediate: UP 0.3% at $74.20 per barrel
  • Brent North Sea Crude: UP 0.2% at $76.69 per barrel
  • New York - Dow: UP 0.8% at 42,732.13 (close)
  • London - FTSE 100: DOWN 0.4% at 8,223.98 (close)

While optimism lingers in the markets, geopolitical tensions and economic uncertainties loom large, keeping investors on edge as 2025 unfolds.

END/BUS/RH/