Asian Stocks Surge Amid Dollar Dominance: Navigating 2025 Market Volatility

Asian stocks rebounded on Friday, contrasting a tepid start to 2025, while the dollar stood strong at a two-year peak amid investor concerns over prolonged high U.S. interest rates. On Wall Street, U.S. stocks fell, and global markets remain cautious of Trump's policies impacting growth expectations and currency dynamics.

Asian stocks made a comeback on Friday, surprising investors with a stronger performance amid a lackluster start to 2025. The dollar maintained its strength, reaching a two-year high against a basket of currencies, as investors grapple with the prospect of U.S. interest rates staying elevated for a longer period.

MSCI's broadest index of Asia-Pacific shares outside Japan edged up by 0.33%, continuing a downward trend for the week. Japan's markets remained closed. Meanwhile, Chinese and Hong Kong stocks showed slight recovery after a turbulent period that raised concerns about the country's economic health and possible trade tensions with the incoming Trump administration.

Investor sentiment remains cautious as the Federal Reserve's unexpected stance on rate cuts and potential inflationary policies under Trump weigh heavily on the market. The broader projection of a pro-business agenda in the U.S. presents both opportunities and challenges globally, necessitating strategic adjustments in currency and equity strategies.

(With inputs from agencies.)