Asian ‍stocks edge up as dollar slides after Fed subpoena news

Asian equities posted gains Monday while the dollar dipped as investors digested news that the US Justice Department subpoenaed the Federal Reserve, raising fears over the central bank’s independence. 

Fed Chair Jerome Powell confirmed the unprecedented move late Sunday, describing it as part of President Donald Trump’s campaign to pressure the Fed for another rate cut, even though the central bank has indicated it plans to hold rates steady.

Powell said the Fed received grand jury subpoenas on Friday related to his Senate testimony in June about a major renovation project of Federal Reserve office buildings. He argued that the threat of criminal charges stemmed from the Fed setting interest rates based on economic conditions rather than presidential preferences. 

The subpoena announcement came after Friday’s soft US jobs report, which showed only 50,000 new positions in December and unemployment dipping to 4.4 percent.

The dollar fell about 0.2 percent against major peers, while gold surged 1.5 percent as investors sought safe-haven assets amid the political uncertainty.

Asian markets saw broad gains in early trading. Hong Kong, Shanghai, Seoul and Taipei climbed, tracking Wall Street’s strong finish on Friday. Bangkok, Manila, Singapore, Kuala Lumpur, and Jakarta also moved higher.

Most stock markets have enjoyed a solid start to the year, with indices in Frankfurt, London, Paris and Seoul hitting record highs last week, fueled by optimism in the tech sector and gains in defence-related shares. 

Oil prices dipped slightly but remained largely supported after a recent rally, as ongoing protests in Iran continued to add geopolitical risk and the US seizure of Venezuelan crude supplies contributed to concerns of a supply glut. 

President Trump warned Tehran of repercussions if demonstrators were harmed, while Iran cautioned against foreign intervention. On Sunday evening, Trump said he was considering potential military action against Iran following reports of a violent crackdown that left hundreds dead.

“They’re starting to, it looks like,” Trump said when asked if Iran had crossed his red line on protester violence. He added that the military was examining “very strong options” and that a meeting with Iranian leadership was being arranged after they expressed interest in negotiations.

Key figures around 0230 GMT showed Hong Kong’s Hang Seng Index up 0.4 percent, the Shanghai Composite up 0.4 percent, while West Texas Intermediate crude was down slightly and Brent North Sea crude held steady. Major currency pairs including the euro/dollar and pound/dollar also saw modest moves.

New York’s Dow closed up 0.5 percent, reflecting ongoing resilience in global markets.