The US dollar remained strong as traders shifted from safe-haven currencies like the Japanese yen, boosted by fresh tariff warnings from the Trump administration.

Trading activity in Asia was muted due to the Lunar New Year holidays, which closed exchanges in mainland China, Hong Kong, Taiwan, Singapore, and South Korea.

Japan’s Nikkei share average rose by 0.5% as of 0055 GMT, aiming to break a three-day decline. Australia’s stock benchmark added 0.8%, with a tech subindex climbing 2.2%.

In contrast, futures for the US S&P 500 and Nasdaq Composite were down about 0.1%, following gains of 0.9% and 2% in the prior session.

The Nasdaq had previously declined over 3%, triggered by DeepSeek’s app popularity, which raised questions about the high valuations of U.S. chipmaker Nvidia and others.

Kyle Rodda, senior financial market analyst at Capital.com, stated, “There appeared to be a level of relief in the rally, mostly because of a forming consensus that while impressive, DeepSeek will either lack the scalability to disrupt the AI space. If anything, the company’s low-cost model will increase demand for GPUs.”

The Federal Reserve is set to announce a policy decision soon, though an on-hold outcome is expected. The dollar index remained flat at 107.91, following two days of 0.2% gains, after ending last week down 0.6% as traders adjusted expectations regarding Trump’s tariffs.

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