Global markets started the week on edge as investors grappled with geopolitical tensions, currency volatility, and shifting risk appetite across assets.
Gold surged to fresh record highs above $5,000 an ounce, buoyed by safe-haven demand and a weaker dollar, while sharp swings in the Japanese yen reignited speculation over possible currency intervention.
Elsewhere, Canada pushed back against US pressure over China trade ties, South Korea’s small-cap stocks surged, and cryptocurrencies slid as investors rotated away from risk.
Safe havens rise as yen volatility hits Asian markets
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Gold surged past $5,000 per ounce on Monday, lifted by safety flows amid dollar weakness after a turbulent week marked by tensions over Greenland and Iran.
Investors also remained unsettled after violent spikes in the Japanese yen.
The yen was trading at 154.3 per dollar, following sharp moves on Friday that sparked speculation about potential intervention.
According to Reuters sources, the New York Federal Reserve conducted rate checks on Friday, raising the possibility of joint US–Japan action to arrest the yen’s slide.
“The market’s inclination is to short the yen but the possibility of co-ordination means it no longer is a one-way bet,” said Prashant Newnaha, senior rates strategist at TD Securities in Singapore, in the Reuters report.
The prospect of coordinated intervention weighed on the dollar and broadly supported other currencies.
Japan’s Nikkei fell about 1.6%, while S&P 500 futures slipped 0.14% and European futures were down 0.13% as traders awaited the Federal Reserve’s policy meeting later in the week.
Japanese Prime Minister Sanae Takaichi said on Sunday her government would take necessary steps against speculative market moves.
Carlos Casanova, senior Asia economist at UBP, said expectations alone could lend support to the currency, adding: “The Japanese yen is likely to stabilise to some extent – though the catalysts for significant appreciation remain limited – while long-term yields are expected to face continued pressure at their current elevated levels.”
Canada pushes back on China trade amid Trump tariff threat
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Canada said it has no intention of pursuing a free trade agreement with China, Prime Minister Mark Carney said on Sunday, responding to warnings from US President Donald Trump, who has threatened punitive tariffs if Ottawa deepens ties with Beijing.
Carney said Canada would respect its obligations under the Canada–US–Mexico Agreement and would not negotiate a free trade deal without notifying its North American partners.
Trump has said he would impose a 100% tariff on Canadian exports if Ottawa “makes a deal” with Beijing.
“If Governor Carney thinks he is going to make Canada a ‘Drop Off Port’ for China to send goods and products into the United States, he is sorely mistaken,” Trump wrote on Truth Social.
Carney stressed that Canada’s recent “preliminary agreement” with China, concluded on Jan. 16, only lowers tariffs on selected goods and remains consistent with existing trade rules.
“We have no intention of doing that with China or any other nonmarket economy,” Carney said. “What we have done with China is to rectify some issues that developed in the last couple of years.”
South Korea small caps surge as retail frenzy builds
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South Korea’s small-cap stocks jumped to their highest level in more than four years, sharply outperforming the benchmark Kospi Index and signalling a broadening rally in local equities.
The Kosdaq Index surged as much as 6.9%, triggering the Korea Exchange’s “sidecar” rule, which temporarily halts program trading to curb volatility.
While the Kospi opened higher, it later slipped as much as 0.9% after hitting the historic 5,000 mark last week.
Retail investors piled into higher-risk trades. The Samsung Kodex KOSDAQ150 Leverage ETF, which offers twice the exposure to the Kosdaq 150 Index, jumped as much as 23%.
A Korea Financial Investment Association website used for mandatory investor training reportedly crashed amid heavy traffic.
Bitcoin slides as investors retreat from risk
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Cryptocurrencies weakened as geopolitical concerns drove investors toward safe havens such as gold.
Bitcoin dropped as much as 3.5% on Sunday to a 2026 low just above $86,000, before rebounding modestly to $87,733 in early Asian trading.
Ether slid as much as 5.7% before recovering 2% to $2,872.
Monday’s bounce “is more of a pause than a big bounce,” said Sean McNulty, APAC derivatives trading lead at FalconX in a Bloomberg report. “We are not seeing a ton of flows so far this morning.”
Spot Bitcoin exchange-traded funds recorded five straight days of outflows totaling $1.7 billion last week in the US, according to Bloomberg data, underscoring fragile sentiment as investors navigate rising geopolitical and macroeconomic risks.
