By Jamie McGeever

(Reuters) – A look at the day ahead in Asian markets.

If the reaction of U.S. stocks, bonds and the dollar to Friday’s torrid U.S. jobs report is anything to go by, Asian markets are in for a bumpy ride on Monday, rocked by a fresh rise in bond yields and inflation fears.

The U.S. economy added over a quarter of a million net new jobs and the unemployment rate fell last month, reflecting a robust labor market. That’s good news. However, the bad news for asset markets, particularly in emerging markets and Asian economies, is the impact on borrowing costs and the dollar.

Treasury yields rose to their highest level in more than a year, the dollar hit a two-year high and traders are forecasting only a quarter-point rate cut from the Fed this year, in September.

The S&P 500 fell to its lowest level since Nov. 5, the day of the U.S. presidential election, and it looks like rising bond yields could dampen investors’ appetite for risky assets like stocks.

Japanese futures point to a decline of more than 1% at Monday’s opening in Tokyo, and it will be similar across the continent.

Sentiment is already fragile as the explosion in long-term bond yields has tightened financial conditions everywhere. Overall financial conditions in emerging markets are the tightest since late 2023, according to Goldman Sachs.

Uncertainty about the potential impact of the new Trump administration’s “America First” trade policies on growth in Asia – particularly China – is another reason to be cautious, if not downright pessimistic.

Monday’s trade data from China is unlikely to dampen sentiment. Economists polled by Reuters expect export growth to accelerate in December, while imports fell for a third straight month.

December’s import numbers are likely to attract more attention as they reflect the strength of domestic demand and may therefore be seen as the first sign of how successful Beijing’s stimulus measures have been.

The trade numbers are the first major indicators from China this week, which include property prices, retail sales, industrial production, investment and unemployment, peaking on Friday with fourth-quarter and full-year GDP.

Investors will also assess the People’s Bank of China’s announcement on Friday that it has suspended purchases of government bonds, fueling speculation that it is stepping up its defense of the yuan. Will this be enough to undercut yields and the yuan?

The annual Asian Economic Forum opens in Hong Kong. Monday’s speakers include Eddie Yue, chief executive of the Hong Kong Monetary Authority, Liu Haoling, CIO of China Investment Corp, and Philip Lane, board member of the European Central Bank.

The story continues