After a volatile US session on Tuesday, markets across the Asia-Pacific region saw subdued and directionless trading, with few fresh catalysts to influence price movements. Regional equities opened lower in reaction to Wall Street’s sharp sell-off but stabilised as the day progressed.
A key factor calming sentiment was a modest recovery in Japanese Government Bonds (JGBs). Earlier heavy selling had pushed long-end yields sharply higher, causing concern over potential spillovers into global rates markets. The partial rebound in JGB prices helped ease fears, supporting regional assets given Japan’s significant role in global capital flows and carry trade.
Overall news flow remained light and largely non-market-moving. In the US, Donald Trump signed an executive order aimed at limiting large institutional investors from purchasing single-family homes. The order outlines a consultation process: the Treasury must define key terms within a month, while federal agencies will explore possible restrictions over 60 days. This move was expected and had little immediate market impact.
In New Zealand, Prime Minister Christopher Luxon formally called a national election for Saturday, 7 November, focusing on securing a second term and driving economic growth. The announcement provided political clarity but did not affect markets noticeably.
China’s People’s Bank of China (PBOC) again intervened against rapid yuan appreciation by setting the daily reference rate at 7.0014 per US dollar—well weaker than the market consensus of 6.9578—despite broad US dollar weakness. This fix demonstrates that Chinese authorities are managing the pace of yuan gains rather than trying to reverse the trend.
South Korea’s president reiterated that foreign exchange markets are guided by supply and demand dynamics, suggesting limited scope for direct stabilisation measures. He anticipates the Korean won to strengthen towards the 1,400 level in the months ahead.
In other news, Air Force One, carrying Donald Trump to the Davos Forum, had to return shortly after take-off due to a minor electrical fault. Travel was resumed on a replacement aircraft.
On the foreign exchange front, the Swiss franc against the Japanese yen (CHF/JPY) continued its strong advance, reaching a new record high above 200, underscoring persistent structural safe-haven demand amid otherwise quiet trading. Gold also remained robust, trading above US$1,860 and setting a fresh record high.
Market performance in Asia-Pacific was mixed:
– Japan’s Nikkei 225 declined 0.64%
– Hong Kong’s Hang Seng fell 0.15%
– Shanghai Composite inched up 0.16%
– Australia’s S&P/ASX 200 dropped 0.39%
Looking ahead, Donald Trump is scheduled to deliver a special address at the World Economic Forum in Davos on 21 January 2026 from 13:30 to 14:15 GMT.
Original Source: Eamonn Sheridan of investinglive.com
