Asian Stocks Slip Amid Cautious Trading and Rising Dollar

Asian stock markets experienced a slight decline as investors remained cautious in end-of-year trading. The dollar's strength, persistent U.S. inflation, and anticipation of Trump administration policies have influenced market dynamics. Despite year-end losses, U.S. stocks showed significant annual gains, and Asian markets reported varied performances.

Asian stocks slipped on Tuesday, reflecting cautious end-of-year trading. Investors have reduced expectations for U.S. rate cuts in 2025 and are preparing for the incoming Trump administration, strengthening the dollar against most currencies.

Trading volumes were thin as the New Year holiday approaches, with Japan on an extended break. Elevated Treasury yields have led to a cooling of the Santa-rally, placing pressure on high equity valuations while boosting the dollar.

In the U.S., major stock indexes saw a broad selloff on Monday, influenced by tax positioning and concerns about 2025. Despite year-end weakness, U.S. stocks experienced strong annual gains, with the Nasdaq and S&P 500 both climbing significantly.

(With inputs from agencies.)