Asian equities declined after the yen led a rally in haven assets with political uncertainty infecting markets across the globe.

Japan’s Topix index dropped for the first time in three days, after the yen touched the highest level since November. That comes after the S&P 500 Index retreated from near-record levels, with shares most tied to economic growth struggling after sagging wage gains and uneven retail results. The euro slumped with French, Italian and Spanish bonds amid political uncertainty in France. Gold surged to the highest price since November on Monday, while 10-year Treasury yields touched a two-week low.

The Trump-fueled rally in equities is faltering as investors assess how the U.S. administration will balance protectionist trade rhetoric with promised tax cuts and spending increases. At the same time, traders are assigning greater risk premiums to European countries where anti-establishment movements are gaining traction ahead of elections. Emerging-market assets advanced as slowing wage growth in the U.S. gives the Federal Reserve room to wait before hiking rates.

“Following the election, the positive shift in sentiment among investors, business, and consumers suggested that the probability of tax cuts and easier regulation was seen to be higher than the probability of meaningful restrictions to trade and immigration,” Goldman Sachs Group Inc. economists led by Alec Phillips wrote in note published late last week. “One month into the year, the balance of risks is somewhat less positive in our view.”

What’s coming up in the markets:

The Reserve Bank of Australia is forecast to hold its cash-rate target at a record-low 1.5 percent Tuesday in its first meeting this year. Central banks in India, New Zealand, Philippines and Thailand also have meetings on monetary policy this week. With a light calendar of U.S. economic data slated for the week, investors will keep an eye on political developments as the Trump administration takes swipes at the judicial branch for suspending its immigration order. Germany delivers factory data on Tuesday that’s expected to show output slowed in December from the prior month. In the U.K., industrial activity also may have moderated, with a report from there due Friday.

(Read also: Asia stocks poised to rise after U.S. jobs growth: Markets wrap)

Here are the main market moves:

The Topix index fell 0.6 percent as of 9:23 a.m. in Tokyo, after a two-day gain. Toyota Motor Corp. dropped 2.5 percent after reporting a 39 percent decline in third-quarter operating profit. Australia’s S&P/ASX 200 Index declined 0.2 percent. South Korea’s Kospi Index retreated 0.1 percent. New Zealand’s main benchmark was down 0.2 percent. Futures on the S&P 500 were little changed after the benchmark gauge slid 0.2 percent on Monday.  The yen was little changed at 111.77 per dollar, after jumping 0.8 percent in the previous session. The euro dropped 0.2 percent to $1.0734 after sliding 0.3 percent on Monday. The Aussie fell for a second day, losing 0.2 percent to pare this year’s gain to 6 percent. Oil climbed 0.4 percent to $53.22 a barrel, after falling 1.4 percent on Monday after Baker Hughes Inc. said U.S. drillers boosted rig count to the most since October 2015. Australian 10-year bonds rose, driving yields down seven basis points to 2.70 percent, while similar-dated New Zealand debt saw yields drop seven basis points to 3.32 percent.  Treasuries gained on Monday by the most in more than two weeks to send 10-year yields falling by six basis points to 2.41 percent.  The yield difference between French and German 10-year bonds jumped to 72 basis points on Monday. Gold slipped 0.2 percent after advancing for three straight days to the highest level since November. Nickel climbed on Monday after the Philippines reiterated plans to shutter mines, while copper rose on the prospect of a strike in Chile. (dan)

Popular

Great Barrier Reef hit by record bleaching

Govt to undo latest curbs on personal imports

Middle East on edge as Israel and Iran trade threats