Asian stocks rise, dollar steady

MSCI’s broadest index of Asia-Pacific shares outside Japan was 0.09% higher

Asian stocks inched up and the dollar was steady on Monday as traders pondered the U.S. monetary policy path after the Federal Reserve’s rate cut last week, while President Donald Trump’s immigration crackdown on worker visas kept sentiment in check.

The focus will be on Indian and tech stocks after the Trump administration said on Friday it would ask companies to pay $100,000 per year for new H-1B worker visas, a blow to the tech sector that relies on skilled workers from India and China.

U.S. stock futures dropped in early trading with the S&P futures down 0.1%. MSCI’s broadest index of Asia-Pacific shares outside Japan was 0.09% higher. Nikkei gained 1% after dropping on Friday.

India’s $283 billion information technology sector gets more than half of its revenue from the U.S.

Trump last month doubled tariffs on imports from India to as much as 50%, partly due to New Delhi’s purchases of Russian oil.

It’s a risk to operating costs and margins first of all. Obviously, it could raise wages and labour costs a bit, said Kyle Rodda, senior financial analyst at Capital.com

Tech companies may also find themselves in a bind where they confront punitive measures if they look to offshore labour because they can’t find enough workers in the U.S., Rodda added.

The yen was slightly weaker at 148.20 per U.S. dollar after strengthening on Friday following the Bank of Japan’s hawkish hold where two board members voted against keeping interest rates steady.

While the central bank kept short-term interest rates at 0.5%, board members Hajime Takata and Naoki Tamura proposed, unsuccessfully, a hike to 0.75% in a move, markets saw as a prelude to a near-term increase in borrowing costs.

Vasu Menon, managing director of investment strategy at OCBC Bank, said Friday’s decision will be taken by markets as a signal that the Japanese central bank is gradually turning hawkish.

It heightens expectations of future rate increases and the potential for higher JGB yields and a stronger yen, which may not be the best piece of news for Japanese equities and bonds in the short term, he said.