Monday 03:30 BST
Regional tensions kept holiday-thinned markets on their toes, with haven assets including US Treasuries and the Japanese yen gaining as tensions surrounding North Korea remained high.
While Australia, New Zealand and Hong Kong were closed for the Easter holiday, the rest of the region’s main markets including China and Japan were trading.
North Korea, still. US vice-president Mike Pence arrived in South Korea on Monday, kicking off a four-country Asia tour. He landed at a US military base next to the demilitarised zone and spoke of an unshakeable commitment to South Korea.
His comments followed a parade in North Korea on Saturday that included several new missiles, and the failed testing of one of its ballistic missiles on Sunday. US officials have warned of “other actions” should the rogue state proceed with a nuclear test.
What to watch
China should grab attention. On Friday the country avoided being named a currency manipulator by the US, lessening the chance of trade talk tensions between the world’s two biggest economies.
On Monday, data showed China’s economy grew at a 6.9 per cent annual rate in the first quarter — better than the expected 6.8 per cent. March retail sales numbers also came in ahead of forecasts, growing 10 per cent year-on-year.
However, analysts warned that the surprises could turn more negative as the year progresses.
“We believe that China’s economy will follow a ‘first high, then low’ trend this year,” said analysts at DBS, who expect growth to slow to between 6.4 per cent and 6.5 per cent over the rest of the year.
Regional jitters weighed on most stock markets, with the stronger yen putting an extra squeeze on equities in Japan. The Nikkei 225 was off 0.5 per cent in Tokyo, while Shanghai and Shenzhen benchmarks were down 0.7 per cent and 0.8 per cent, respectively.
In Seoul, however, the benchmark Kospi Composite gained 0.4 per cent.
Forex and fixed income
Analysts have noted the irony of the yen, given Japan’s location, being considered a haven when markets are worried about North Korea — but that did not stop the currency reaching a fresh five-month high against the dollar at ¥108.15 in Asian trading.
“Pressure stays firmly on the downside” for the dollar against the yen, said PakLai Ng, analyst at 4Cast-RGE, the consultancy. He added that a break through ¥108 per dollar would leave traders looking at a test of ¥107.59, the yen’s peak achieved last July.
US Treasuries were also gaining on haven flows, pushing the yield on the benchmark 10-year note to its own five-month low at 2.19 per cent as Asian trading got under way. It steadied at 2.20 per cent as activity picked up.
For market updates and comment follow us on Twitter @FTMarkets