Asian shares were on the defensive on Tuesday as stringent curbs on travel to the U.S. ordered by President Donald Trump brought home to investors that he is serious about putting his radical campaign pledges into action.
Global stocks posted their biggest loss in six weeks after Trump signed an executive order on Friday to bar Syrian refugees indefinitely and suspend travel to the United States from seven Muslim-majority countries, sparking widespread protests.
The move drew criticism from some U.S. policymakers and business leaders, including the chief executives of Goldman Sachs Group and Ford Motor Co, and irked many foreign leaders.
“His stance is really inward-looking, making investors nervous about his ‘moderateness’,” said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management.
MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.3 percent while Japan’s Nikkei dropped 1.1 percent.
On Monday, U.S. S&P 500 Index fell 0.6 percent, its biggest fall in a month. MSCI’s broadest gauge of the world’s stock markets shed 0.6 percent, its biggest fall in a month and a half.
In the currency market, the dollar was at 113.73 yen, having fallen 1.1 percent on Monday. It was down 2.9 percent so far this month, after three straight months of sizable gains.
The Bank of Japan ends a monetary meeting later on Tuesday and is widely expected to keep policy on hold.
The euro traded little changed at $1.0700, consolidating after its rebound this month from its 14-year low of $1.0340 set on Jan. 3.
In a possible sign of increased anxiety among investors, the safe-have Swiss franc strengthened to a seven-month high of 1.0637 franc per euro on Monday.
Worries about a political shift to populist leaders in Europe are rising.
French bond yields rose to the highest level since September 2015, on rising uncertainty over the Presidential election later this year.
Conservative leader Francois Fillon, seen as the front-runner, is now battling to contain a scandal over allegedly unlawful payments to his wife while the Socialists on Sunday picked a hard-left candidate, possibly helping popular far-right leader Marine Le Pen.
Italian debt yields climbed to 1 1/2-year high partly as early elections could be called following a ruling from the country’s constitutional court last week.
By contrast, the yield on German debt fell on Monday even as data showed inflation in Germany hit a 3 1/2-year high in January.
News of Germany posting a national inflation rate of 1.9 percent stoked talk of an unwinding of monetary stimulus by the European Central Bank, even though the inflation outcome was below expectations.
Elevated uncertainty on Trump’s policies, including his plans for tax cuts and fiscal spending, offset optimism on the U.S. economy.
Data on Monday showed U.S. consumer spending accelerated in December while inflation showed some signs of picking up last month.
The core PCE price index, the Federal Reserve’s preferred inflation measure, rose 1.7 percent on a year-on-year basis after a similar gain in November.
Oil prices were little moved after a small fall on Monday after news of another weekly increase in U.S. drilling activity.
U.S. crude futures traded at $52.62 per barrel, almost unchanged from Monday close.
(This article has not been edited by DNA’s editorial team and is auto-generated from an agency feed.)