Fresh "sell America" sentiment put some pressure on Treasuries in Tokyo, while investors wait to see how U.S. markets respond to transatlantic tension over Greenland.
U.S. markets resume trade, having been closed for a holiday when the rest of the world sold stocks and the dollar in response to President Donald Trump threatening tariffs on European allies opposing his push to control the Danish arctic territory.
A 3D-printed miniature model of U.S. President Donald Trump, the EU flag and the word "Tariffs" appear in this illustration taken January 17, 2026. REUTERS/Dado Ruvic/Illustration/File Photo
Trump has told Norway's Prime Minister by text that he no longer feels obliged to "think purely of Peace" because he was not awarded this year's Nobel Peace Prize.
Ten-year Treasury yields rose 2.4 basis points in the Asia session and equity suggests a fall at the open.
Investors have been exhausted by a year of shock-and-awe policy shifts and are now waiting on Europe's response, to be decided at an emergency meeting of EU leaders on Thursday to assess how scarifying Trump's threats may be.
Citi on Tuesday downgraded European equities on the basis of uncertainty clouding the outlook for earnings.
Yields climb
Elsewhere, Japanese yields speared higher and demand at a 20-year debt auction faltered as Prime Minister Sanae Takaichi takes Japan to an early election in February. Debt investors fret that talk of tax cuts and a mandate to spend don't bode well for the state of future government finances.
The yen has missed out on much of a boost from this week's broad dollar selling and hovered near 158 to the dollar.
Graphics are produced by Reuters.
Key developments that could influence markets on Tuesday:
U.S. markets return from holiday
World Economic Forum at Davos
German ZEW survey
Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.
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