Asian Currencies Mixed; U.S. Recession Fears May Weigh — Market Talk

South Korea's benchmark Kospi falls 1.9% to 2522.26 in early trade, tracking Wall Street's sharp falls overnight amid recession fears. Tech and battery stocks led a broad local selloff after President Trump over the weekend unnerved investors by refusing to rule out a recession this year. Retail and institutional investors are net sellers. Index heavyweight Samsung Electronics falls 1.3%. Memory-chip maker SK Hynix loses 2.5%. Electric-vehicle battery maker LG Energy Solution slides 2.6%. USD/KRW is 0.4% higher at 1,458.70 in Seoul onshore trading. South Korea's 10-year government bond yield is up 2.8 bps at 2.801%. (kwanwoo.jun@wsj.com)

The South Korean won depreciated past 1,455 per dollar, marking its third consecutive session of losses, as investor sentiment remained soured by escalating global trade tensions.

Last Friday, a report surfaced revealing that South Korea plans to implement countermeasures in April in response to the US's proposed tariffs on auto imports.

This news has raised concerns among automakers, who warn that such tariffs could severely impact both exports and the domestic auto parts industry, and urging the government to highlight their investments in the US and consider offering support measures.

However, the depreciation of the won was partially offset by a softening US dollar, driven by growing concerns about the US economy.

The latest Market Talks covering FX and Fixed Income. Published exclusively on Dow Jones Newswires throughout the day.

0328 GMT - The Singapore dollar weakens slightly against its U.S. counterpart on a possible technical correction after a recent rally. The dollar index "dodged a bullet" with the U.S. nonfarm payrolls report not coming out as weak as "whisper numbers," but the index still looks vulnerable, Westpac Strategy Group says in commentary. The policy-uncertainty shock diminishing the U.S. economic exceptionalism narrative likely has further scope to run, Westpac says. "Repeated tariff policy reversals and a broadly unsettling fiscal policy setting environment leave markets far more attuned to asymmetric growth risks," it adds. USD/SGD is 0.1% higher at 1.3320. (ronnie.harui@wsj.com)

0314 GMT - South Korea's current account surplus is likely to narrow sharply in 2025 due to declining exports amid slower economic activity in the U.S. and China, research company BMI writes in a note. Geopolitical conditions are also expected to limit semiconductor and auto shipments from South Korea, whose trade surplus with the U.S. is highly susceptible to President Trump's tariff policy, BMI says. The firm expects South Korea's trade surplus to narrow to 3.6% of gross domestic product in 2025 from an estimated 5.3% in 2024. Additionally, South Korea's easing monetary policy is likely to drive an increase in imports, further weighing on the country's trade balance, it adds. (kwanwoo.jun@wsj.com)

0232 GMT - China's February inflation data points to weakening demand in 1Q, Barclays analysts say in a research note. Although the decline in headline CPI was in part distorted by the timing of the Lunar Near Year, negative prints for both core and services CPI point to softer demand, they say. Even after removing the festive distortions, February CPI only rose 0.1%. China's auto sales growth slowed in the first two months compared with 4Q last year despite trade-in subsidies, suggesting "some payback effects" from strong 4Q demand, the bank says. Soft consumption will likely remain a constraint for price recovery, and there aren't any signs of improvement in the labor market entering 2025, Barclays adds. (sherry.qin@wsj.com)

0231 GMT - The Chinese yuan weakens against the U.S. dollar in offshore and onshore markets, weighed down by signs of deflation in China. In February, China's CPI fell 0.7% on year, compared with economists' expectations for a 0.5% decline, while the PPI dropped 2.2% on year, against market expectations fore a drop of 2.1%. "It's obvious that domestic demand remains very poor," RBC Capital Markets' Alvin T. Tan says in an email, adding that this will "also be a drag on overall economic growth, and more stimulus measures will be required, including further rate and RRR cuts," the head of Asia FX Strategy says. USD/CNY rises 0.3% to 7.2557; USD/CNH gains 0.2% to 7.2569. (ronnie.harui@wsj.com)

0134 GMT - Downside price pressures in China still linger, even after accounting for the country's Spring Festival holiday factor, says Ho Woei Chen of UOB's Global Economics & Markets Research in research report. Chinese data released Sunday showed January-February CPI averaging a 0.1% on-year contraction, core CPI averaging on-year 0.3% growth, PPI averaging 2.2% on-year contraction, the economist notes. For 2025, UOB expects additional 50-100bp reduction to banks' reserve requirement ratio and 30bp cut to benchmark 7-day reverse repo rate, with loan prime rates to fall by 30 bps. (ronnie.harui@wsj.com)

0112 GMT - The Nikkei Stock Average is flat at 36886.32, as gains in consumer and railway stocks help offset losses in electronics and machinery stocks. Unicharm rises 4.2% and Seibu Holdings is 2.2% higher, while Kioxia Holdings declines 3.4% and Mitsubishi Heavy Industries is 3.3% lower. USD/JPY is at 147.30, compared with 147.56 as of Friday's Tokyo stock market close. Investors are focusing on any developments related to U.S. trade policy as well as Japanese monetary policy. (kosaku.narioka@wsj.com; @kosakunarioka)

0047 GMT - The yen strengthens against most other G-10 and Asian currencies in early trade amid prospects of large wage increases in Japan. The Japanese Trade Union Confederation, known as Rengo, is scheduled to announce preliminary results for the annual spring wage negotiations this Friday. "We expect Rengo to announce another strong wage result on Friday which could bring forward expectations of BOJ rate hikes," CBA's Global Economic & Markets Research team says in a note. U.S.-Japan interest-rate differentials could narrow further and pull down USD/JPY, the team adds. USD/JPY falls 0.4% to 147.30; AUD/JPY sheds 0.4% to 92.97. (ronnie.harui@wsj.com)

0041 GMT - South Korea's benchmark Kospi edges up 0.1% to 2566.21 in early mixed trade, reversing from its opening fall. Retail investors are net buyers while foreign and institutional investors are net sellers. Energy stocks advance while shipbuilding shares retreat. Oil refiners SK Innovation and S-Oil rise 4.5% and 5.4%, respectively. Electric-vehicle battery maker LG Energy Solution gains 2.9%. Shipbuilder HD Hyundai Heavy Industries and Hanwha Ocean fall 4.6% and 3.6%, respectively. USD/KRW is 0.1% higher at 1,447.60, compared with Friday's Seoul onshore trading close. South Korea's 10-year government bond yield is down 3.3 bps at 2.773%. (kwanwoo.jun@wsj.com)

0013 GMT - JGBs edge lower in the morning Tokyo session, tracking Friday's price declines in U.S. Treasurys. JGBs and Treasurys tend to move in tandem. The domestic market may also be weighed by Japanese data released earlier showing scheduled cash earnings rose 3.1% in January versus 2.6% in December. "Regular pay growth surged in January and with this year's spring wage negotiations set to result in stronger pay hikes than last year, wage growth will pick up further over the course of the year," Capital Economics' Marcel Thieliant says in commentary. "There's an increasingly strong case for a rate hike" at the BOJ's April 30-May 1 meeting, the head of Asia-Pacific says. The JGB 5-year yield is up 1.5 bps at 1.135%. (ronnie.harui@wsj.com)

2347 GMT - Japanese stocks may rise as concerns about U.S. tariffs and higher borrowing costs ebb for now. Nikkei futures are up 0.5% at 36985 on the SGX. USD/JPY is at 147.52, compared with 147.56 as of Friday's Tokyo stock market close. Investors are focusing on any developments related to U.S. trade policy as well as Japanese monetary policy. The Nikkei Stock Average fell 2.2% to 36887.17 on Friday. (kosaku.narioka@wsj.com)

The Singapore dollar weakens slightly against its U.S. counterpart on a possible technical correction after a recent rally. The dollar index "dodged a bullet" with the U.S. nonfarm payrolls report not coming out as weak as "whisper numbers," but the index still looks vulnerable, Westpac Strategy Group says in commentary. The policy-uncertainty shock diminishing the U.S. economic exceptionalism narrative likely has further scope to run, Westpac says. "Repeated tariff policy reversals and a broadly unsettling fiscal policy setting environment leave markets far more attuned to asymmetric growth risks," it adds. USD/SGD is 0.1% higher at 1.3320. (ronnie.harui@wsj.com)

2041 ET - South Korea's benchmark Kospi edges up 0.1% to 2566.21 in early mixed trade, reversing from its opening fall. Retail investors are net buyers while foreign and institutional investors are net sellers. Energy stocks advance while shipbuilding shares retreat. Oil refiners SK Innovation and S-Oil rise 4.5% and 5.4%, respectively. Electric-vehicle battery maker LG Energy Solution gains 2.9%. Shipbuilder HD Hyundai Heavy Industries and Hanwha Ocean fall 4.6% and 3.6%, respectively. USD/KRW is 0.1% higher at 1,447.60, compared with Friday's Seoul onshore trading close. South Korea's 10-year government bond yield is down 3.3 bps at 2.773%. (kwanwoo.jun@wsj.com)

2013 ET - JGBs edge lower in the morning Tokyo session, tracking Friday's price declines in U.S. Treasurys. JGBs and Treasurys tend to move in tandem. The domestic market may also be weighed by Japanese data released earlier showing scheduled cash earnings rose 3.1% in January versus 2.6% in December. "Regular pay growth surged in January and with this year's spring wage negotiations set to result in stronger pay hikes than last year, wage growth will pick up further over the course of the year," Capital Economics' Marcel Thieliant says in commentary. "There's an increasingly strong case for a rate hike" at the BOJ's April 30-May 1 meeting, the head of Asia-Pacific says. The JGB 5-year yield is up 1.5 bps at 1.135%. (ronnie.harui@wsj.com)

1947 ET - Japanese stocks may rise as concerns about U.S. tariffs and higher borrowing costs ebb for now. Nikkei futures are up 0.5% at 36985 on the SGX. USD/JPY is at 147.52, compared with 147.56 as of Friday's Tokyo stock market close. Investors are focusing on any developments related to U.S. trade policy as well as Japanese monetary policy. The Nikkei Stock Average fell 2.2% to 36887.17 on Friday. (kosaku.narioka@wsj.com)

The Singapore dollar is trading steadily against its U.S. counterpart in the Asian session, supported by easing worries over U.S. tariffs. President Trump on Thursday gave a one-month reprieve from 25% tariffs on a range of goods from Canada and Mexico. "This tariff outcome is not as bad as feared," DBS Group Research's Chang Wei Liang says in commentary. However, this "once again reflects Trump's inconsistency over his messaging and application of tariffs," the forex and credit strategist says. USD/SGD is little changed at 1.3333. (ronnie.harui@wsj.com)