Wild Commodity Swings and Asia-Pacific Market Jitters Persist

Hong Kong, 27 January 2026 — The Asia-Pacific financial landscape witnessed heightened volatility yesterday, with sharp swings in gold and silver prices dominating investor sentiment. Meanwhile, regional trade and inflation developments continued to influence market behaviour, underscoring lingering uncertainty across the region.

US President Donald Trump reignited trade tensions in the Asia-Pacific by raising tariffs on South Korean imports from 15% to 25%, citing Seoul’s delay in ratifying a 2025 trade agreement. The hike targets automobiles, lumber and pharmaceuticals, prompting a sell-off in Korean export-linked equities. Hyundai Motor shares fell roughly 4% in early trading before stabilising.

South Korea swiftly responded. A ruling party official confirmed that legislation to enact US investment commitments has been introduced and will undergo review imminently. Seoul’s trade envoy is scheduled to meet the United States Trade Representative in Washington shortly, suggesting diplomatic efforts to contain further escalation.

Regional economic highlights:

Japan’s services inflation remains robust, with the Bank of Japan reporting a 2.6% year-on-year increase in December, reflecting ongoing cost pass-through due to labour shortages.

In the UK, retail inflation accelerated to 1.5% year-on-year, the fastest pace in two years, as energy costs and higher employer National Insurance contributions feed through to prices. The surge challenges the narrative that inflation has peaked.

Australian business activity improved modestly, though capacity constraints remain elevated. The National Australia Bank survey indicated business conditions rose to +9, with confidence at +3, while wage and cost pressures showed a slight uptick.

China’s industrial sector saw a tentative rebound. Profits climbed 5.3% year-on-year in December, marking the first full-year gain since 2021, but gains were driven entirely by foreign enterprises. Domestic state-owned enterprises experienced a 3.9% decline, and private-sector profits remained flat.

Geopolitical concerns linger, with intelligence reports suggesting Iran’s leadership faces increasing internal strain, potentially its weakest position since the 1979 Islamic Revolution.

Equities performance across Asia-Pacific:

Major FX rates, including the yen, traded within narrow ranges, while investors remain cautious ahead of the January FOMC meeting. Commodity watchers note ongoing volatility in gold and silver, with some analysts projecting further bullish momentum amid continued market uncertainty.