Asia-Pacific markets exhibited a mixed performance on Monday as investors digested China’s decision to maintain its benchmark lending rates unchanged, coupled with growing concerns over escalating U.S.-China trade tensions. The People’s Bank of China (PBOC) held the one-year loan prime rate (LPR) steady at 3.10% and the five-year LPR at 3.60%, signaling a cautious approach to monetary policy amid persistent pressure on the yuan and global economic uncertainties.

The move aligns with Beijing’s broader strategy of relying on fiscal stimulus rather than aggressive rate cuts to sustain economic growth. Despite China’s stronger-than-expected 5.4% GDP expansion in Q1 2024, investor sentiment remains fragile due to renewed U.S. tariffs targeting Chinese electric vehicles, semiconductors, and other key exports. Analysts warn that additional trade restrictions could further strain China’s export-driven economy, prompting authorities to roll out new domestic consumption incentives, including tax breaks and infrastructure spending.

In regional markets, India’s Nifty 50 and BSE Sensex posted gains of 0.56% and 0.73%, respectively, supported by robust corporate earnings and resilient consumer demand. Conversely, Japan’s Nikkei 225 tumbled 1.33%, reflecting broader risk aversion amid global market volatility. South Korea’s Kospi edged down 0.16%, while Australia and Hong Kong remained closed for the Easter holiday, contributing to subdued trading volumes.

Meanwhile, U.S. stock futures pointed lower following a turbulent week on Wall Street, where the S&P 500, Dow Jones, and Nasdaq all recorded losses amid concerns over prolonged high interest rates and geopolitical instability. With the U.S. and China locked in a protracted trade dispute, market participants remain on edge, awaiting further policy cues and economic data that could dictate the region’s financial trajectory in the coming weeks.