Asia-Pacific markets trade subdued after Trump’s attack on Fed chair sends Wall Street tumbling

The Bank of Japan is likely to pause rate hikes in its May meeting in part due to market uncertainty and softer inflation, said Moody’s Analytics.

“The Bank of Japan looks set to hold its fire at its upcoming policy meeting, with tariff uncertainty and jittery financial markets forcing a pause,” wrote Stefan Angrick, Moody’s Analytics’ head of Japan and frontier markets economics.

Washington’s reciprocal tariffs announcements earlier in April triggered a sharp markets sell-off, fueling the kind of volatility that the Bank of Japan prefers to avoid when changing policy, he added.

The country’s inflation grew 3.6% year on year in March, marking three straight years that the headline inflation figure is above the Bank of Japan’s 2% target.

However, the central bank is not done tightening rates, thanks to sticky inflation and improving wage dynamics. Additionally, the Japanese yen still remains weaker than economic fundamentals suggest even though it appreciated recently, which adds to the case for more tightening down the road, the economist noted.

—Lee Ying Shan

Gold prices rose to a fresh record high, with some analysts seeing more room for bullion prices to run after U.S. President Donald Trump’s pressure campaign on Fed chair Jerome Powell.

Gold futures on the U.S. Commodity Exchange were up to $3,436 per ounce while spot gold prices are at $3,425.26 per ounce.

“President Donald Trump’s push against Fed President Jerome Powell could fuel more caution on international markets and a flight toward safe-haven instruments and away from U.S. assets,” said Konstantinos Chrysikos from finance broker Kudotrade.

—Lee Ying Shan

Stocks ended Monday in the red, although they came back from their session lows in the late afternoon.

The Dow Jones Industrial Average tumbled 971.82 points, or 2.48%, to settle at 38,170.41. The S&P 500 shed 2.36% to finish at 5,158.20, while the Nasdaq Composite lost 2.55% and closed at 15,870.90.

— Lisa Kailai Han

Bitcoin hit its highest level of the month, reaching $88,557.01 at one point as the stock market sold off yet again. It was last trading about 3% higher at $87,040.70.

“This move is less about enthusiasm and more about exhaustion. Risk markets are rotating,” said Ben Kurland, CEO at crypto research platform DYOR. “What we’re seeing is a slow bleed from overextended positions into safer liquidity. Bitcoin’s bounce isn’t driven by momentum traders, it’s the result of sidelined capital inching back into the market while equities digest macro uncertainty. In other words, risk isn’t off, it’s just being repriced.”

Bitcoin was trading more in line with stocks for much of the month amid tariff-fueled volatility and uncertainty, but has slowly been decoupling. It’s up about 5% in April while the S&P 500 is down more than 8% in that period. Meanwhile, gold is up 9.5% on the month.

If bitcoin can meaningfully clear the $88,000 level it would be a positive near-term development for the crypto asset, putting next resistance near $95,900, according to Fairlead Strategies’ Katie Stockton.

— Tanaya Macheel

The latest drop for the greenback comes after Friday’s criticism of Federal Reserve Chair Jerome Powell from President Donald Trump. Krishna Guha, vice chairman at Evercore ISI, said Monday on “Squawk Box,” said those comments by Trump could add more fuel to the trend of foreign investors pulling out of the U.S.

“We’re seeing a clear signal from the market that it doesn’t like even the idea that the president might try to remove the Fed chair. There has been some loss of confidence in U.S. economic policy making in recent weeks. We’ve seen that in this very odd combination of upward pressure at times on longer-term bond yields combined with a weaker dollar. That suggests global investors pulling capital out of the U.S.,” Krishna Guha, vice chairman at Evercore ISI, said Monday on “Squawk Box.”

— Jesse Pound