Asian stock markets opened lower on Tuesday, tracking overnight weakness on Wall Street and heightened concern over the Federal Reserve’s independence after US President Donald Trump dismissed Governor Lisa Cook.
Broad losses across the region
Japan’s Nikkei 225 fell 1.1% in early trade, weighed down by declines in technology and financial shares. South Korea’s Kospi slipped 0.8%, while Hong Kong’s Hang Seng lost 0.2%. Mainland China’s Shanghai Composite edged down 0.1%, and Australia’s ASX 200 dropped 0.3%. Analysts noted that investors remain cautious, with little in the way of new domestic catalysts to offset external uncertainty.
Dollar pressured after Fed shake-up
The US dollar retreated in Asian trading, with the dollar index down 0.3%. The move followed Trump’s sudden dismissal of Fed Governor Lisa Cook, raising concerns over the central bank’s autonomy. Short-term Treasury yields fell as markets priced in a higher probability of interest rate cuts, while longer-term yields edged higher, reflecting fears of fiscal slippage and inflationary risks.
Global investors on edge
Market watchers stressed that Asia is now moving in lockstep with the global reaction to US political risk. “The firing of a Federal Reserve governor undermines confidence in institutional stability and feeds into an already volatile environment,” one strategist commented. The development has added pressure on regional currencies and equities, with investors shifting capital into perceived safe-haven assets such as gold and the Japanese yen.
Outlook for the trading day
With no major regional data releases scheduled for Tuesday, Asian markets are expected to remain sensitive to developments in the United States. Traders are awaiting comments from Fed Chair Jerome Powell later in the week, which could provide clarity on policy direction. Until then, caution is likely to prevail, with equity indices vulnerable to further swings depending on the dollar’s trajectory.
REFH – Newshub, 26 August 2025
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