The dollar index slipped below 97.8 on Wednesday, giving back some of the previous session’s gains after President Donald Trump offered no indication of altering his tariff policies in his State of the Union address. Trump expressed confidence that foreign countries would honor their trade agreements and suggested that tariffs could eventually replace income taxes. The US began implementing a temporary 10% global tariff on Tuesday, which the White House is reportedly aiming to raise to 15%, following the Supreme Court’s decision to strike down Trump’s reciprocal tariffs. On the monetary policy front, Susan Collins stated that holding interest rates steady is likely appropriate amid an improving labor market and persistent inflation risks, while Thomas Barkin added that policy is well-positioned to manage economic risks. Nevertheless, markets continue to price in roughly three 25-basis-point rate cuts from the Fed this year.

The Japanese yen traded near 156 per dollar on Wednesday, following a sharp decline in the previous session after reports that Prime Minister Sanae Takaichi expressed concern over further rate hikes in a meeting last week with Bank of Japan Governor Kazuo Ueda. Takaichi also nominated two reflationist academics to the central bank’s policy board, reinforcing expectations that the BOJ will take a cautious approach to further rate increases. Known for her pro-stimulus stance, Takaichi supports both expansionary fiscal policies and looser monetary settings, creating uncertainty around the pace of BOJ rate hikes even as speculation mounts that the central bank could resume policy normalization later this year. Separately, earlier reports indicated that US authorities had proactively conducted rate checks last month to support the yen and were ready to coordinate intervention at Japan’s request.

Gold rose to around $5,180 per ounce on Wednesday, recouping part of the previous session’s losses, supported by trade and geopolitical uncertainty. US President Trump’s new 10% global tariff came into effect on Tuesday, with his administration seeking to hike it to 15% in an effort to rebuild its tariff agenda after the Supreme Court invalidated much of his sweeping levies. On Monday, Trump also warned that higher tariffs could be imposed on countries that “play games” with recent trade agreements. Meanwhile, investors are watching the continuation of US-Iran nuclear talks on Thursday, with Iran vowing on Tuesday to do “whatever it takes” to secure a deal with Washington. However, gains in bullion were limited by fading expectations of near-term Federal Reserve rate cuts. Two Fed officials said on Tuesday that they see no immediate need to adjust monetary policy, citing improving labor market conditions and persistent inflation.

WTI crude oil futures rose to around $66.2 per barrel on Wednesday after two consecutive sessions of decline, as investors weighed supply risks ahead of a third round of nuclear talks between the US and Iran. Iran's deputy foreign minister said on Tuesday that his country will do "whatever it takes" to reach a deal with the US over its nuclear program. The remarks came after President Trump on Monday expressed a preference for diplomacy but warned of serious consequences if no agreement is reached. Attention is on the Strait of Hormuz, a critical chokepoint through which roughly 20% of the world’s oil passes, where any escalation in hostilities could significantly disrupt supply. Traders are also assessing the potential impact on demand from new US trade measures, as Trump’s 10% global tariff came into effect on Tuesday, with the administration working to raise it to 15%.

Total construction work in Australia fell 0.1% quarter-on-quarter to A$80,011.8 million in Q4 2025, missing market expectations for a 0.9% increase and marking a second straight quarterly decline after a 0.7% drop in Q3. The contraction was largely driven by a sharp pullback in engineering work, which slid 1.3% to A$35,908.4 million amid softer infrastructure-related activity. By contrast, building activity expanded, with total building work up 0.9%, including a 1% rise in residential construction and a 0.7% gain in non-residential projects. Regionally, construction activity declined in the Australian Capital Territory (-16.3%), Northern Territory (-11.4%), Western Australia (-1.7%), and Queensland (-1.1%). Meanwhile, output increased in South Australia (2.3%), New South Wales (1.5%), Victoria (0.9%), and Tasmania (0.3%). On an annual basis, overall construction activity rose 3% in Q4, accelerating slightly from a 2.9% increase in Q3.

Japan’s Nikkei 225 Index climbed over 2% to above 58,500 on Wednesday, marking a fresh all-time high as it tracked a technology-driven rebound on Wall Street amid easing concerns over potential artificial intelligence disruptions. Sentiment improved after Anthropic signaled plans to forge partnerships, fueling expectations that its Claude chatbot technology will integrate with, rather than displace, existing business models. Investors are also awaiting earnings from Nvidia for clearer signals on AI-related demand. Japanese equities drew additional support from a sharp weakening of the yen, following reports that Prime Minister Sanae Takaichi expressed concern about further rate hikes during a meeting last week with Kazuo Ueda, Governor of the Bank of Japan. Technology shares led the advance, including Advantest (+1.9%), Disco Corp (+4.3%), and Tokyo Electron (+2.4%). Other notable gainers were Furukawa Electric (+1.6%), JX Advanced Metals (+6.6%), and Nitto Boseki (+5.2%).