Asian stocks declined on Tuesday while the dollar surged to its highest level in over five months. This surge was driven by robust US retail sales data for March, which boosted the belief that the Federal Reserve will likely maintain interest rates without haste throughout the year. 

The rising geopolitical tensions restrained risk appetite, driving up the prices of both gold and oil. Meanwhile, investors in Asia are shifting their attention to China as they await GDP data scheduled for release at 0200 GMT. 

The Chinese government announced that the economy, ranking as the world’s second-largest after the US, experienced an impressive rapid annual growth rate of 5.3% in the first quarter of the year. In quarterly terms, it expanded at a pace of 1.6%

However, despite robust manufacturing and consumer spending in January and February, bolstered by the Lunar New Year holiday, indicators for March showed a less optimistic picture. House prices continued to decline, consumer spending slowed, and industrial output also weakened. 

“The sky is not blue in China,” remarked Ipek Ozkardeskaya of Swissquote in a commentary, suggesting that such signals imply “the underlying problems are not going away.”

The Shanghai Composite index dropped by 1.7% to 3,007.07, while Hong Kong’s Hang Seng index went down by 2.1% to 16,248.97. South Korea’s Kospi also went down by 2.3% to 2,609.63 while Australia’s S&P/ASX 200 dropped by 1.8% to 7,612.50

Tokyo’s Nikkei 225 declined by 1.9% to 38,471.20 as the dollar continued its ascent against the Japanese yen, reaching fresh 34-year highs. By late afternoon, the dollar was trading at 154.51 yes, up from 154.27 yen. 

In other parts of Asia, Taiwan’s Taiex led the regional downturn, dropping by 2.7%. Markets in Bangkok were closed for the Songkran holiday.