Chinese blue chips advanced 0.4 percent, building on a 10 percent surge in August

Asian stock markets were largely subdued on Monday, as profit-taking weighed on several high-performing Japanese technology stocks. In contrast, Chinese markets found support from investor optimism surrounding the country’s domestic artificial intelligence progress.

Trading activity was relatively muted due to a U.S. market holiday, while futures on Wall Street and European equities posted modest gains after ending lower on Friday.

The U.S. dollar and government bonds faced mild pressure at the start of the week, as investors geared up for a series of key economic releases this week. The data calendar includes manufacturing and services surveys as well as several labor market indicators, culminating in the closely watched August payrolls report on Friday.

Asian shares decline as Chinese blue chips advance

The prospect of lower borrowing costs has continued to support Wall Street near record highs, offering a potential buffer as September, historically the weakest month for the S&P 500 over the past 35 years, begins.

In futures markets, S&P 500 and Nasdaq contracts both slipped 0.1 percent. In the European stock markets, EUROSTOXX 50 futures edged 0.1 percent higher, while FTSE futures were little changed and DAX futures gained 0.1 percent.

In Asia, Japan’s Nikkei fell 1.34 percent, dragged down by a 9 percent drop in chipmaker Advantest, which came under selling pressure after surging 49 percent over the past three months. South Korea’s benchmark index declined 0.7 percent, while Indonesian equities lost 1.5 percent following protests that unsettled the government and prompted the central bank to intervene in support of the rupiah.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.4 percent on Monday, extending gains after reaching a four-year high last week, supported by a strong rally in Chinese equities. Chinese blue chips also advanced 0.4 percent, building on a 10 percent surge in August.

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Dollar falls as rate cut bets increase

Uncertainty over U.S. trade policy persisted after a Court of Appeals ruled that many of President Donald Trump’s broad tariffs were unlawful, though the measures will remain in force until mid-October pending an appeal to the Supreme Court.

While the administration retains alternative tools to impose sector-specific levies, the ruling casts doubt over existing trade agreements and ongoing negotiations

In addition, political pressure for more aggressive interest rate cuts has weighed on the U.S. dollar, which remained subdued at 97.791 after losing 2.2 percent in the previous month. The euro gained 0.3 percent to $1.1710, while the dollar was steady at 146.93 against the yen.

In commodities, gold continued to benefit from the weaker dollar and expectations of lower rates. The precious metal rose 2.2 percent last week and added a further 1.0 percent on Monday, reaching a four-month high of $3,481 an ounce.

Meanwhile, oil prices were softer ahead of a scheduled increase in OPEC+ production in the coming months. Brent crude fell 0.4 percent to $67.21 per barrel, while U.S. crude also declined 0.4 percent to $63.78.