On Monday, Asia-Pacific markets displayed a mixed performance following a tumultuous trading week worldwide. U.S. stocks, expected to open lower, had experienced significant volatility due to uncertainties surrounding trade policies. Investors closely monitored steel manufacturers ahead of new tariffs on imports. Key indices in Japan, South Korea, and Australia showed modest gains, while Hong Kong and mainland China's markets declined. Additionally, China announced retaliatory tariffs on Canadian agricultural goods, responding to Ottawa’s previous import duties on Chinese products. The U.S. also saw its major stock averages close higher after a volatile Friday.

The Asia-Pacific region faced a mix of economic challenges and opportunities as global trade tensions escalated. In Japan, cash earnings rose by 2.8% year-on-year in January, though this was a slower pace compared to December's revised figure. Meanwhile, real cash earnings fell by 1.8%, marking the largest decline since February 2024. This shift could influence the Bank of Japan's monetary policy decisions. South Korea’s Kospi and Kosdaq indices posted slight increases, reflecting some optimism amidst regional uncertainties. However, Hong Kong's Hang Seng Index and mainland China's CSI 300 both slid, with the former dropping significantly. China's consumer inflation dipped below zero for the first time in 13 months, adding to deflationary concerns.

Trade relations between China and Canada deteriorated further over the weekend. Beijing imposed retaliatory tariffs on certain Canadian agricultural products, including a 100% levy on rapeseed oil, oil cakes, and peas, alongside a 25% tariff on aquatic products and pork from Canada. These measures were a direct response to Canada's imposition of high tariffs on Chinese electric vehicles and steel and aluminum products last year. The announcement led to a surge in China’s Zhengzhou rapeseed meal futures, which rose over 5% on Monday. The timing of these actions highlighted the ongoing tit-for-tat strategy in international trade disputes.

In South Korea, Hyundai Steel shares tumbled by nearly 9% as investors braced for the U.S. government's 25% tariff on all steel and aluminum imports, set to take effect on Wednesday. The company has been grappling with an oversupply of Chinese steel and a downturn in the domestic construction sector. To address these challenges, Hyundai Steel reportedly accepted voluntary layoffs from its technical staff. This move underscores the broader pressures facing the steel industry amid shifting global trade dynamics.

Meanwhile, the cryptocurrency market experienced turbulence as Bitcoin plunged more than 7%. The sharp decline followed U.S. President Donald Trump's executive order establishing a strategic bitcoin reserve managed by the Treasury Department. Known as the U.S. Digital Asset Stockpile, it will hold confiscated cryptocurrencies and prohibit their sale, positioning them as a permanent store of value. The move aims to consolidate federal digital asset holdings and conduct a comprehensive audit, signaling a new era of regulation in the crypto space.

The week ahead promises continued volatility as markets adjust to evolving trade policies and economic data. Investors will be watching closely for any signs of stabilization or further shifts in global trade relations. The interplay between economic indicators and geopolitical factors will likely shape the trajectory of financial markets in the coming days. While some sectors show resilience, others face mounting pressure, creating a complex landscape for traders and policymakers alike.