Asian stocks today: Markets trade mostly in red; Nikkei sheds 1%, HSI remains flat

Asian markets opened on a weak note on Tuesday, as most indices slipped into the red as investors reacted to trade tensions and political developments in Japan. In US, markets remained closed for the Martin Luther King Jr Day holiday.Hong Kong's HSI was up 35 points to 26,599. Nikkei trimmed 519 points or 0.97% to 53,064. Shanghai and Shenzhen were down 0.12% and 0.89%, respectively. Meanwhile, Kospi was 0.36% up, trading at 4,922 at 11:30 am IST. Investors across the globe remained cautious after US President Donald Trump threatened to impose fresh tariffs on European imports, unsettling major trading partners that have significant investments in the United States. US stock futures fell sharply, tracking losses across European markets on Monday, while oil prices were steady. The announcement also triggered turbulence in Japan’s bond market. Government bond yields climbed rapidly after Takaichi indicated she would dissolve parliament to seek a stronger mandate, buoyed by high public approval ratings. She has also floated a proposal to temporarily suspend the food tax. Markets are increasingly concerned that a renewed mandate could lead to higher government spending, reigniting worries over Japan’s public finances. As a result, bond prices fell and yields jumped. The yield on the 40-year Japanese government bond rose to a record 4% on Tuesday, while yields on other long-term bonds surged to their highest levels in decades. Investors are now turning their attention to a busy week in the United States, which will feature more corporate earnings and fresh inflation data closely watched by the Federal Reserve. The US central bank meets in two weeks and is expected to keep its key interest rate unchanged as it balances signs of a slowing labour market against inflation that remains above its 2% target. Japan’s central bank is also set to conclude its policy meeting later this week.