US, China Extend Trade Truce to Jan. 10 Ahead of Trump-Xi Summit 
Gold Holds Near $4,275 as Rising Treasury Yields Fuel Fed Rate Hike Bets 
Japan Private-Sector Growth Slows as Domestic Demand Weakens 
Fed Unveils Stablecoin Rules Under GENIUS Act 
RBI Uses $10 Billion Currency Swaps to Drain Excess Rupee Liquidity 
Dollar Holds Near Two-Month High as Yen Approaches 160 
China’s ‘Lipstick King’ Says AI Won’t Replace Livestream Hosts 
European Stocks Fall as Bond Yields and Geopolitical Risks Weigh 
Oil Prices Jump 3% as Houthi Attack Revives Supply Fears 
US Stock Futures Fall as Treasury Yields Surge Ahead of Trump-Xi Summit 
Asian Stocks Fall as Surging Bond Yields Rattle Markets 
Wall Street Falls as Treasury Yields Surge, Oil Rebounds on Iran Tensions 
U.S. 10-Year Treasury Yield Hits 2007 High as Fed Rate Hike Bets Rise 
Australia Unemployment Hits Five-Year High Despite Strong Jobs Growth 
Mexico-US Trade Talks Delayed to October as Tariff Negotiations Continue 
Soybean Futures Slip as Traders Await Trump-Xi Trade Signals 
US 10-Year Treasury Yield at 6% Emerges as New Market Risk Threshold 
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Most Asian currencies traded within a tight range on Tuesday, while the U.S. dollar edged lower as renewed geopolitical concerns dampened investor appetite for American assets. Market sentiment turned cautious after U.S. President Donald Trump reiterated his demands regarding Greenland, including the possibility of tariffs on Europe and even potential military action, which unsettled global markets and pressured the greenback.
A U.S. market holiday on Monday resulted in limited overnight cues, keeping Asian markets subdued and largely risk-averse. Regional currencies showed little reaction to China’s central bank leaving its key loan prime rate unchanged, a move that was widely anticipated by investors. Meanwhile, attention shifted to Japan after Prime Minister Sanae Takaichi announced a snap election scheduled for early February, adding a layer of political uncertainty ahead of a closely watched Bank of Japan meeting later this week.
The Japanese yen remained muted, with the USD/JPY pair slipping slightly but staying near recent highs. While Prime Minister Takaichi’s strong approval ratings suggest continuity in leadership, markets are questioning how much room the government has for additional fiscal stimulus. Concerns over rising Japanese government bond yields weighed on the yen, even as investors debated whether the Bank of Japan will proceed with further interest rate hikes after its last increase in late 2025. Uncertainty around upcoming spring wage negotiations has also made traders cautious.
The U.S. dollar index and futures both declined modestly in Asian trading, reflecting unease over Trump’s Greenland stance ahead of his expected appearance at the World Economic Forum in Davos. Asian currencies largely remained constrained by this risk-off mood. The Chinese yuan held near its strongest levels in over two years, supported by firm midpoint fixings from the People’s Bank of China. The Australian dollar and Taiwan dollar posted modest gains, benefiting from dollar weakness, while the South Korean won, Singapore dollar, and Indian rupee saw slight declines. The Indian rupee, in particular, hovered near the 91-per-dollar level amid growing concerns about India’s economic outlook.
Overall, Asian currency markets remained cautious, balancing regional economic signals against rising global political risks.
