Asian Currencies Mixed Amid Uncertainty Over U.S. TariffsMarket Talk

2026 ET - South Korea's benchmark Kospi rises 1.7% to 2367.20 in early trade, as bargain hunting kicks in after a broad selloff in the prior session amid U.S. tariff concerns. Semiconductor and defense stocks are among the top gainers driving the market rebound. Retail investors are net buyers. Index heavyweight Samsung Electronics rises 3.4% after its above-consensus 1Q preliminary earnings report. Memory-chip maker SK Hynix gains 4.7%. Self-propelled howitzer maker Hanwha Aerospace climbs 5.6% after securing a new contract win in Poland. USD/KRW is 0.1% higher at 1,469.15 in Seoul onshore trading. South Korea's 10-year government bond yield is down 4.4 bps at 2.648%. (kwanwoo.jun@wsj.com)

2018 ET - Japanese stocks are broadly higher following their sharp selloffs in recent sessions amid fears about U.S. tariffs. Electronics, financial and auto stocks are leading the gains. Tokyo Electron is up 9.3%, Nomura Holdings gains 10% and Toyota Motor is 8.0% higher. Treasury Secretary Scott Bessent said Japan is likely to be prioritized in trade talks with the Trump administration. USD/JPY is at 147.80, up sharply from 145.59 as of Monday's Tokyo stock market close. Investors are focusing on any developments in tariff talks with the U.S. The Nikkei Stock Average is up 5.6% at 32884.79 following a 7.8% drop on Monday. (kosaku.narioka@wsj.com; @kosakunarioka)

2005 ET - JGB yields jump in the morning Tokyo session, tracking overnight rise in U.S. Treasury yields. Both JGBs and Treasurys tend to move in tandem. With JGB yields having fallen sharply in recent sessions, there seems to be a strong possibility of a technical rebound in yields, SMBC Nikko Securities' Ataru Okumura says in a research report. However, given an uncertain outlook over whether talks between the U.S. and various countries can achieve a swift easing of reciprocal tariffs, a sustained rise in yields looks improbable, the senior Japan rates strategist says. Hence, near-term focus will likely be on where yields settle, Okumura adds. The 20-year JGB yield climbs 15bps to 2.050%. (ronnie.harui@wsj.com)

1948 ET - Japanese stocks may rise following their sharp selloffs in recent sessions amid fears about U.S. tariffs. Nikkei futures are up 6.4% at 32675 on the SGX. USD/JPY is at 147.88, up sharply from 145.59 as of Monday's Tokyo stock market close. Investors are focusing on any responses from governments around the world to the U.S. tariffs. The Nikkei Stock Average fell 7.8% to 31136.58, its lowest level since October 2023, on Monday. (kosaku.narioka@wsj.com)

1737 ET - Canada is in the early stages of a crisis — fueled by President Trump's global tariff policy — that fiscal stimulus and lower interest rates won't necessarily resolve, warns former Bank of Canada governor Stephen Poloz. "We're talking about probably the greatest intentional destruction of wealth," Poloz tells Canada's CTV News, after a third day of selling on global equity markets that has wiped out trillions in wealth. "You can't fix that with a program that replaces income, or lower rates... These are structural effects on the economy." Earlier in the day, Prime Minister Mark Carney — Poloz's predecessor — warned the likelihood of a recession in the U.S. has escalated and Canada could not avert significant damage. Poloz says Trump's tariff policy will reduce household income across the global economy. (paul.vieira@wsj.com; @paulvieira)

1621 ET - Over half of Canadian households say they are avoiding the purchase of U.S. goods and services due to trade friction between Washington and Ottawa, according to a survey conducted by the Bank of Canada. Retail executives in Canada have indicated a marked shift in spending patterns away from U.S. products, and the result of the BOC's quarterly consumer-expectations poll adds credence to this development. Over half, or 55%, say there are choosing to spend more on Canadian goods because of the trade conflict between the U.S. and Canada, and thereby avoid U.S.-made products. The BOC notes, however, that the scope of this so-called Buy Canada movement is unclear. The BOC said interviews with survey participants suggest some consumers were willing to pay a bit more for Canadian goods, while others say cost constraints make it difficult to shell out for higher-priced local goods. (paul.vieira@wsj.com, @paulvieira)

1541 ET - The Treasurys rally takes a break, allowing yields to recover, while the dollar strengthens. Markets remain volatile as many investors fear tariffs may cripple the economy and boost prices. March CPI is due Thursday and it could show some impact of early tariffs, BNP Paribas economists write. Consensus in a WSJ survey sees 12-month CPI at 2.5%, slowing from February's 2.8%. BNPP forecasts 2.6%. The WSJ Dollar Index rises 0.5% as the greenback strengthens 1.6% against the yen and weakens 0.4% to the euro. The 10-year yield gains 0.172 percentage point, its largest daily increase in a year, to 4.164% and the two-year rises 0.061 p.p. to 3.733%. (paulo.trevisani@wsj.com; @previsani)

1410 ET - The tariff situation in Canada will force an inward focus of capital and development. CIGI Senior Fellow Dan Ciuriak tells the WSJ that military modernization, housing development, and completing the internal market are all projects that Canada can work on now that there is a more adversarial stance between the U.S. and Canada on trade. Previously, these had been put on the back burner, but have become more viable forms of investment internally. "We've got enough margins of adjustment to more than offset the cost of the Trump tariffs," he says, adding that Canada has been stuck in a bad domestic development equilibrium for a long time. "Now we're being jolted out of it and there's nothing like a crisis to actually do that for you," Ciuriak says. (adriano.marchese@wsj.com)

1357 ET - Canada's crown corporations may have an opportunity to step in while the private sector takes the more cautious approach to tariffs, says CIGI Senior Fellow Dan Ciuriak. He tells the WSJ that private sector investment will be on hold as tariffs hit the bottom lines of many companies, but Canadian government-owned enterprises can support the country domestically in times of need. "In the past when we've had challenges like this Canada did not hesitate to turn to Crown corporations to fill gaps in our economy," Ciuriak says. (adriano.marchese@wsj.com)

1335 ET - The U.S. gross domestic product is going to decline as a result of Trump's tariff plan, but that might just be part of the story, says Bhanu Baweja, Chief Strategist at UBS. "The key is the decline in domestic demand," Baweja says. Every 1% decline of real GDP decline is typically consistent with a 6.9% decline in earnings growth, meaning that we will likely see flat or a decline in earnings growth in the U.S. and even bigger declines in margins, Baweja says. Stocks such as utilities and real estate are expected to do well, with fixed income set to be defensive and gold seen as a safe haven, Baweja adds. (sabela.ojea@wsj.com; @sabelaojeaguix)

1316 ET - The bearish results from the Bank of Canada's quarterly business outlook would generally translate into a rate cut. However, the BOC has signaled that its utmost worry is tariff-fueled price increases widening across the economy and becoming entrenched. Economists at National Bank Financial say the outlook for a BOC rate cut next week looks "murky," as signs of weaker growth are somewhat overshadowed by inflation risks tilted higher, and a selloff that continues in equity markets. "If it were only up to the data, the BOC would likely pause," NBF says. It expects BOC's policy rate, now at 2.75%, to decline further through the year to 2% as data show a sharp weakening in activity. (paul.vieira@wsj.com, @paulvieira)

1312 ET - In January and February, U.S. imports surged, in part due to a rush by American firms to get ahead of tariffs. As seen in vehicle sales, a jump in consumer activity through March probably represents the same trend, Don Rissmiller of Strategas writes. But with full tariffs about to come into effect, that could be the last gasp before a prolonged slowdown, Rissmiller writes, so policymakers are on the clock to take action in order to avoid a recession, he concludes. "This pop should be short-term. We probably only have 1-2 months to find offsets to tariffs (negotiations lowering the rates, a friendly tax bill, substantial deregulation, etc.) before a recession takes hold," he writes. (matt.grossman@wsj.com; @mattgrossman)

0706 GMT - South Korea's benchmark Kospi slumped to a 17-month low on a broad selloff amid U.S. tariff concerns. The index fell 5.6% to close at 2328.20--the lowest level since Oct. 31, 2023, extending losses for a fourth consecutive session. Foreign investors were net sellers. The Korea Exchange briefly suspended program trading to help ease market volatility, for the first time since August 2024. Index heavyweight Samsung Electronics fell 5.2%. Memory-chip maker SK Hynix tumbled 9.6%. Carmaker Hyundai Motor slid 6.6%. USD/KRW settled 2.3% higher at 1,467.80, compared with Friday's Seoul onshore trading close. South Korea's 10-year government bond yield was down 2.3 bps at 2.669%. (kwanwoo.jun@wsj.com)

0703 GMT - Barclays lowers its forecast for U.K. real gross domestic product growth--or growth adjusted for inflation--for 2025 to 0.5% from 0.7% previously following last week's tariffs announcement from U.S. President Trump. "Tariff announcements on the U.K. were broadly in line with our existing assumption, but more intense global tariffs and heightened uncertainty lead us to revise down our real GDP forecast for 2025," Jack Meaning, Barclays chief U.K. economist says in a note. The bank's real GDP growth forecast for 2026 is unchanged at 1.3%. (miriam.mukuru@wsj.com)

0701 GMT - The U.S. tariffs are likely to prompt the Bank of Japan to adopt a wait-and-see stance, dependent on data and market developments for the time being, JPMorgan's Ayako Fujita says in a research note. "We think the U.S. tariff announcement and the subsequent market reaction have ruled out the possibility of a rate hike at the (April 30-May 1) meeting and reduced the likelihood of a rate hike even in the coming months," the chief Japan economist says. However, if the global economy doesn't enter a severe recession, the BOJ will probably at least keep its commitment to normalize policy toward the lower bound of the neutral rate, at 1%, the economist adds. (ronnie.harui@wsj.com)

0644 GMT - The world may be entering a new era of trade protectionism, Natixis economists say in a research note. They reckon that China opted for a direct retaliation for this round of tariff due to the size and full coverage of the U.S. levies and China's leverage in future negotiations. However, Natixis thinks most other countries will likely prefer negotiations with the U.S., especially Southeast Asian countries. The U.S. could extend the negotiation window longer to allow more time to coordinate with multiple countries, they say. For China and the U.S., issues like the Panama port and TikTok could be bundled into the talks, but the two sides will likely prolong the economic stand-off based on self interest. (sherry.qin@wsj.com)

0642 GMT - The banking sector is set to benefit from the opportunity created by U.S. tariffs that will lead to the long-term reorganization of supply chains of large corporates and small-and-medium enterprise exporters, JP Morgan says in a research note. Companies will call on banks for services such as payments, lending facilities and custody, analysts write. "Corporate expansion in the U.S. (i.e. near-shoring) will be an ongoing theme and Banks with [investment banking]/corporate counterparty expertise in this new tariff world will be well positioned," they note. However, the industry will first have to face the negative effects of slower global growth and its consequences on the setting of interest rates, on asset quality and loss provisions, they add. (elena.vardon@wsj.com)

0638 GMT - Eurozone government bonds kick off the week firmer, with yields falling amid growing concerns over the possibility of a global recession to be brought about by U.S. tariffs. "Throughout the week, the spotlight remains on the trade war, with potential deals or retaliation plans under scrutiny," Danske Bank Research's Emilie Herbo says in a note. The EU is expected to announce a retaliation proposal on Monday. The 10-year Bund yield falls 5.5 basis points to 2.514%, according to Tradeweb. Other eurozone bond yields also trade mostly lower but to less extent. Italy's 10-year BTP yield is up 3bps at 3.787% after Fitch Ratings affirmed Italy's BBB rating with a positive outlook. (emese.bartha@wsj.com)

0634 GMT - The dollar falls as concerns about the U.S. economic fallout of President Trump's tariff policy continue to weigh. "The U.S. economy is barrelling rapidly towards recession, and will probably end up taking most of the rest of the world with it," Pepperstone strategist Michael Brown says in a note. The dollar has taken a battering as it's the most exposed asset to Trump's "tariff incoherence" with the Japanese yen and Swiss franc being the safe havens of choice, he says. The DXY dollar index falls 0.5% to 102.466. It reached a six-month low of 101.267 Thursday after Trump announced sweeping tariffs.(renae.dyer@wsj.com)

0618 GMT - Germany's 3 billion euro launch of the new February 2035-dated green Bund will be the highlight in an otherwise relatively modest government bond supply in the eurozone this week, Commerzbank Research's Rainer Guntermann says in a note. Germany will launch this Bund on Tuesday, the same day as a seven-year Dutch bond sale and five- and 10-year bond auction in Austria. Portugal, Spain and Italy will hold bond auctions on Wednesday, Thursday and Friday, respectively. Commerzbank Research estimates this week's eurozone government bond supply volume around a moderate 23 billion euros, the rates strategist says. (emese.bartha@wsj.com)

0558 GMT - U.S. Treasurys are expected to continue to perform well, driven by the impact of President Trump's tariffs, says Pepperstone's Michael Brown in a note. "Treasuries should continue to perform well, with haven demand providing a helping hand, though we have come a long way, and Fed expectations seem overly-dovish," the senior research strategist says. Trump's 'Liberation Day' will probably go down as one of the biggest, and most obvious, policy mistakes of the last few decades, he says. "Not only were the 'reciprocal' tariffs calculated in a way that defies all logic, as well as being at the hawkish end of market expectations, they are nothing but bad news," the senior research strategist says. (emese.bartha@wsj.com)

0550 GMT - U.S. Treasury yields fall but stay above Friday's six-month lows, as investors continue pondering whether U.S. President Trump's tariffs lead to a recession in the U.S. economy. "The U.S. economy is barrelling rapidly towards recession, and will probably end up taking most of the rest of the world with it," Pepperstone's Michael Brown says in a note. "Concurrently, inflation is going to ramp substantially higher for the next couple of quarters, at the very least," the senior research strategist says. Tariffs are, of course, the root cause of all this, he says. The 10-year U.S. Treasury yield trades 7 bps lower at 3.918%, but above Friday's low of 3.860%, according to Tradeweb. (emese.bartha@wsj.com)

0531 GMT - Eurozone government bond yield spreads proved to be insensitive to the latest risk-off on the markets as a result of the escalation in trade policy, says LBBW's Elmar Voelker in a note. "According to the prevailing pattern of recent years, the increase in risk aversion should have led to a spread widening in the eurozone periphery," the senior fixed income analyst says. LBBW attributes the spread resilience to assumptions that growing hopes of further monetary easing in the eurozone have compensated for this effect. "However, the spread widening pressure may well increase in the coming weeks if financial markets slip more permanently into a 'risk-off' mood," especially as peripheral spreads above Bunds have recently consolidated at multi-year lows, he says. (emese.bartha@wsj.com)

0524 GMT - Thailand's subdued inflation expectations open the door for further monetary-policy easing by the Bank of Thailand, two economists of UOB's Global Economics & Markets Research say in a research report. Also, Thailand's near-term growth outlook is deteriorating, owing to ongoing cyclical and structural challenges and direct and indirect effects of U.S. reciprocal tariffs, the economists say. Based on Thailand's latest data and near-term growth outlook, UOB lowers its 2025 forecast for the country's headline inflation to an average of 0.6% from 1.2% previously. UOB expects two more 25bp rate cuts--one in April and another in June. (ronnie.harui@wsj.com)

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0706 GMT - South Korea's benchmark Kospi slumped to a 17-month low on a broad selloff amid U.S. tariff concerns. The index fell 5.6% to close at 2328.20--the lowest level since Oct. 31, 2023, extending losses for a fourth consecutive session. Foreign investors were net sellers. The Korea Exchange briefly suspended program trading to help ease market volatility, for the first time since August 2024. Index heavyweight Samsung Electronics fell 5.2%. Memory-chip maker SK Hynix tumbled 9.6%. Carmaker Hyundai Motor slid 6.6%. USD/KRW settled 2.3% higher at 1,467.80, compared with Friday's Seoul onshore trading close. South Korea's 10-year government bond yield was down 2.3 bps at 2.669%. (kwanwoo.jun@wsj.com)

0703 GMT - Barclays lowers its forecast for U.K. real gross domestic product growth--or growth adjusted for inflation--for 2025 to 0.5% from 0.7% previously following last week's tariffs announcement from U.S. President Trump. "Tariff announcements on the U.K. were broadly in line with our existing assumption, but more intense global tariffs and heightened uncertainty lead us to revise down our real GDP forecast for 2025," Jack Meaning, Barclays chief U.K. economist says in a note. The bank's real GDP growth forecast for 2026 is unchanged at 1.3%. (miriam.mukuru@wsj.com)

0701 GMT - The U.S. tariffs are likely to prompt the Bank of Japan to adopt a wait-and-see stance, dependent on data and market developments for the time being, JPMorgan's Ayako Fujita says in a research note. "We think the U.S. tariff announcement and the subsequent market reaction have ruled out the possibility of a rate hike at the (April 30-May 1) meeting and reduced the likelihood of a rate hike even in the coming months," the chief Japan economist says. However, if the global economy doesn't enter a severe recession, the BOJ will probably at least keep its commitment to normalize policy toward the lower bound of the neutral rate, at 1%, the economist adds. (ronnie.harui@wsj.com)

0644 GMT - The world may be entering a new era of trade protectionism, Natixis economists say in a research note. They reckon that China opted for a direct retaliation for this round of tariff due to the size and full coverage of the U.S. levies and China's leverage in future negotiations. However, Natixis thinks most other countries will likely prefer negotiations with the U.S., especially Southeast Asian countries. The U.S. could extend the negotiation window longer to allow more time to coordinate with multiple countries, they say. For China and the U.S., issues like the Panama port and TikTok could be bundled into the talks, but the two sides will likely prolong the economic stand-off based on self interest. (sherry.qin@wsj.com)

0642 GMT - The banking sector is set to benefit from the opportunity created by U.S. tariffs that will lead to the long-term reorganization of supply chains of large corporates and small-and-medium enterprise exporters, JP Morgan says in a research note. Companies will call on banks for services such as payments, lending facilities and custody, analysts write. "Corporate expansion in the U.S. (i.e. near-shoring) will be an ongoing theme and Banks with [investment banking]/corporate counterparty expertise in this new tariff world will be well positioned," they note. However, the industry will first have to face the negative effects of slower global growth and its consequences on the setting of interest rates, on asset quality and loss provisions, they add. (elena.vardon@wsj.com)

0638 GMT - Eurozone government bonds kick off the week firmer, with yields falling amid growing concerns over the possibility of a global recession to be brought about by U.S. tariffs. "Throughout the week, the spotlight remains on the trade war, with potential deals or retaliation plans under scrutiny," Danske Bank Research's Emilie Herbo says in a note. The EU is expected to announce a retaliation proposal on Monday. The 10-year Bund yield falls 5.5 basis points to 2.514%, according to Tradeweb. Other eurozone bond yields also trade mostly lower but to less extent. Italy's 10-year BTP yield is up 3bps at 3.787% after Fitch Ratings affirmed Italy's BBB rating with a positive outlook. (emese.bartha@wsj.com)

0634 GMT - The dollar falls as concerns about the U.S. economic fallout of President Trump's tariff policy continue to weigh. "The U.S. economy is barrelling rapidly towards recession, and will probably end up taking most of the rest of the world with it," Pepperstone strategist Michael Brown says in a note. The dollar has taken a battering as it's the most exposed asset to Trump's "tariff incoherence" with the Japanese yen and Swiss franc being the safe havens of choice, he says. The DXY dollar index falls 0.5% to 102.466. It reached a six-month low of 101.267 Thursday after Trump announced sweeping tariffs.(renae.dyer@wsj.com)

0618 GMT - Germany's 3 billion euro launch of the new February 2035-dated green Bund will be the highlight in an otherwise relatively modest government bond supply in the eurozone this week, Commerzbank Research's Rainer Guntermann says in a note. Germany will launch this Bund on Tuesday, the same day as a seven-year Dutch bond sale and five- and 10-year bond auction in Austria. Portugal, Spain and Italy will hold bond auctions on Wednesday, Thursday and Friday, respectively. Commerzbank Research estimates this week's eurozone government bond supply volume around a moderate 23 billion euros, the rates strategist says. (emese.bartha@wsj.com)

0558 GMT - U.S. Treasurys are expected to continue to perform well, driven by the impact of President Trump's tariffs, says Pepperstone's Michael Brown in a note. "Treasuries should continue to perform well, with haven demand providing a helping hand, though we have come a long way, and Fed expectations seem overly-dovish," the senior research strategist says. Trump's 'Liberation Day' will probably go down as one of the biggest, and most obvious, policy mistakes of the last few decades, he says. "Not only were the 'reciprocal' tariffs calculated in a way that defies all logic, as well as being at the hawkish end of market expectations, they are nothing but bad news," the senior research strategist says. (emese.bartha@wsj.com)

0550 GMT - U.S. Treasury yields fall but stay above Friday's six-month lows, as investors continue pondering whether U.S. President Trump's tariffs lead to a recession in the U.S. economy. "The U.S. economy is barrelling rapidly towards recession, and will probably end up taking most of the rest of the world with it," Pepperstone's Michael Brown says in a note. "Concurrently, inflation is going to ramp substantially higher for the next couple of quarters, at the very least," the senior research strategist says. Tariffs are, of course, the root cause of all this, he says. The 10-year U.S. Treasury yield trades 7 bps lower at 3.918%, but above Friday's low of 3.860%, according to Tradeweb. (emese.bartha@wsj.com)

0531 GMT - Eurozone government bond yield spreads proved to be insensitive to the latest risk-off on the markets as a result of the escalation in trade policy, says LBBW's Elmar Voelker in a note. "According to the prevailing pattern of recent years, the increase in risk aversion should have led to a spread widening in the eurozone periphery," the senior fixed income analyst says. LBBW attributes the spread resilience to assumptions that growing hopes of further monetary easing in the eurozone have compensated for this effect. "However, the spread widening pressure may well increase in the coming weeks if financial markets slip more permanently into a 'risk-off' mood," especially as peripheral spreads above Bunds have recently consolidated at multi-year lows, he says. (emese.bartha@wsj.com)

0524 GMT - Thailand's subdued inflation expectations open the door for further monetary-policy easing by the Bank of Thailand, two economists of UOB's Global Economics & Markets Research say in a research report. Also, Thailand's near-term growth outlook is deteriorating, owing to ongoing cyclical and structural challenges and direct and indirect effects of U.S. reciprocal tariffs, the economists say. Based on Thailand's latest data and near-term growth outlook, UOB lowers its 2025 forecast for the country's headline inflation to an average of 0.6% from 1.2% previously. UOB expects two more 25bp rate cuts--one in April and another in June. (ronnie.harui@wsj.com)

The South Korean won depreciated past 1,469 per dollar on Monday, continuing its losses as investors remained concerned about a global recession due to US President Trump's tariff policies.

The Trump administration has shown no signs of yielding on its aggressive trade strategy, with Trump emphasizing that "sometimes you have to take medicine to fix something." However, the new policies, along with retaliatory actions from other countries, have raised concerns about global economic disruption.

Elsewhere, the won reversed its gains last Friday after the Constitutional Court unanimously voted to remove President Yoon Suk-yeol following his declaration of martial law late last year.

Acting Chief Justice Moon Hyung-bae dismissed Yoon's justifications, stating that the president had overstepped his authority and calling his actions "a serious challenge to democracy."

South Korea's benchmark Kospi fell 0.9% to close at 2465.42, extending losses for a third consecutive session. The index lost 3.6% for the week. The Constitutional Court's ruling to oust impeached President Yoon and clear the way for electing a new leader eased the political crisis but wasn't enough to offset other headwinds to growth or financial markets, Capital Economics economist Shivaan Tandon says. U.S. President Trump's sweeping tariffs continued to weigh on sentiment. Memory-chip makers Samsung Electronics and SK Hynix fell 2.6% and 6.4%, respectively, following an overnight selloff in their U.S. peers. USD/KRW settled 2.2% lower at 1,434.10 in Seoul onshore trading. South Korea's 10-year government bond yield was down 2.2 bps at 2.716%. (kwanwoo.jun@wsj.com)

The South Korean won climbed toward 1,440 per dollar, rallying for the fourth straight session to hit a four-week high as the long-awaited court verdict on President Yoon’s impeachment helped ease political turmoil.

The Constitutional Court is scheduled to deliver its ruling later Friday, and if he is removed from office, it will trigger a 60-day countdown for a presidential election.

The ruling could help ease, if not conclude, the monthslong political instability that followed his brief imposition of martial law in early December.

Meanwhile, a weakening US dollar added further support to the won as Trump’s sweeping tariffs stoked fears of an all-out trade war and a global recession.

This prompted South Korea’s Acting President Han Duck-soo to call for talks with US officials and order emergency support for businesses to cushion the blow.