Asia markets start week in red as investors eye U.S. policy shift

August 4, 2025 (MLN): Asia-Pacific markets mostly retreated on Monday as investors reacted to renewed concerns over U.S. monetary policy and a fresh round of tariffs, with Wall Street losses on Friday fueling speculation of a Federal Reserve rate cut next month.

Chinese and Hong Kong equities opened lower, mirroring broader weakness across the region. The Hang Seng Index shed 0.23%, while the CSI 300 Index, tracking mainland blue chips, dropped 0.42%.

Japanese shares saw steeper declines, weighed down by financial stocks and major exporters as the yen weakened against the U.S. dollar.

The Nikkei 225 tumbled 2.05% to 39,969.79, and the broader Topix index slid 1.81% to 2,895.54 in early trading.

Losses were pronounced in export-oriented sectors, including automotive, amid rising expectations that the Federal Reserve could ease rates in response to a softening U.S. jobs market.

Meanwhile, the yen dipped 0.22% to 147.69 per dollar, amplifying pressure on Japan’s equity markets.

Elsewhere, energy markets were in focus following a key OPEC+ decision over the weekend.

The group shared plans to raise oil production by 547,000 barrels per day in September, citing robust economic conditions and persistently low global stockpiles.

“Given fairly strong oil prices at around $70, it does give OPEC+ some confidence about market fundamentals,” said Amrita Sen, co-founder of Energy Aspects, adding that tightening inventories were also influencing the group’s strategy.

Despite the output increase, oil prices slipped in early Asian trade. Brent crude futures fell 43 centsto $69.24 a barrel, while U.S. West Texas Intermediate crude dropped 39 cents to $66.94 extending losses from Friday, when both benchmarks closed about $2 lower.

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