Asian shares and the US dollar weakened on Monday as investors turn defensive

Asian shares and the US dollar weakened on Monday as investors turned defensive ahead of key US jobs data and heightened trade tensions, with President Trump threatening to double tariffs on steel and aluminium to 50% starting June 4. Markets showed limited reaction, reflecting widespread scepticism that Trump will follow through, given past reversals, though factory surveys from Asia show that activity slowed last month. Beijing rejected his criticism, while the EU hinted at retaliation and cited a recent US court ruling against earlier tariffs to strengthen its position. Japan’s Nikkei dropped 1.4%, Hong Kong’s Hang Seng slid 2.5%, and S&P 500 futures fell 0.4%. The Canadian dollar, despite being directly targeted, firmed slightly as the broader dollar index softened. Attention is now on US jobs data, expected to show 130,000 new payrolls and steady 4.2% unemployment, with weaker figures possibly reviving rate cut expectations. Fed Governor Waller flagged downside risks from tariffs, keeping the door open for cuts later this year. Meanwhile, the ECB is widely expected to lower rates by 25 basis points this week, and oil prices rose on relief that OPEC+ avoided a deeper output hike.