The Japanese yen surged sharply early Monday, surprising traders just hours after Prime Minister Shigeru Ishiba’s ruling party suffered a historic setback in the July 20 upper house election. Rather than triggering panic, the defeat spurred renewed demand for the yen as a global safe haven amid rising geopolitical uncertainty.

At 11:00 a.m. Tokyo time (10:00 p.m. ET on Sunday), the yen climbed 0.22% against the U.S. dollar to 148.49, rebounding after two consecutive weeks of losses. Investors had been bracing for political instability, but the market’s reaction suggests that risk aversion has now taken center stage.

Investors Seek Safety as Global Risks Rise

The yen’s rise reflects a flight to safety in a volatile global environment. With mounting trade tensions and political shocks, investors appear to be gravitating toward stable, low-risk assets—and the Japanese currency fits that profile. The Asia-Pacific region kicked off the week with choppy trading, shaped by central bank signals and geopolitical headlines.

China Holds Loan Rates Steady as Yuan Flatlines

China's central bank kept both one-year and five-year loan prime rates unchanged on Monday, offering no fresh stimulus. The offshore yuan barely moved, gaining only 0.02% to reach 7.1788 per dollar by 9:50 a.m. local time. The message from Beijing was clear: no surprises, no rate cuts—at least for now.

Despite caution, Chinese stocks opened the week in positive territory. The Hang Seng Index rose 0.55%, while the mainland’s CSI 300 index gained 0.28%. However, optimism remained muted, with external threats like U.S. trade policies still dominating market sentiment.

U.S. Trade Deadline Looms, Asia Watches Closely

U.S. Commerce Secretary Howard Lutnick reiterated on Sunday that August 1 would be a “hard deadline” for countries to start paying tariffs. While he suggested that negotiations could still occur afterward, the tone signaled that there would be costs. This stance added new stress for Asian exporters, with traders trying to assess just how far Washington will go.

Singapore Dollar Under Pressure as Stocks Extend Gains

The Singapore dollar came under additional pressure Monday as new tariff threats from the White House—particularly targeting pharmaceuticals and semiconductors—fueled fresh worries. These two industries are among Singapore’s top exports, and analysts from Barclays and Asia Decoded now predict that the Monetary Authority of Singapore could ease its currency policy as early as this month.

Despite currency stress, Singapore’s Straits Times Index recorded its 11th consecutive gain, reaching a new high of 4,225.79 before slightly retreating to 4,215.22 by 10:10 a.m. local time. The biggest gains came from utilities, finance, and real estate sectors. Top-performing stocks included Mapletree Logistics Trust (+1.69%), Yangzijiang Shipbuilding (+1.67%), and Keppel (+1.36%).

India Lags Behind, Crypto Holds Steady

In contrast, Indian markets failed to mirror the regional uptick. The Nifty 50 Sensex fell 0.26% by 9:30 a.m. IST, highlighting persistent uncertainty and uneven investor sentiment across Asia.

Cryptocurrencies also saw modest gains. Bitcoin rose 0.21% to $118,368.56 by 12:16 p.m. Singapore time. After a volatile previous week, even small upward moves are helping to retain bullish interest among digital asset traders.


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