SINGAPORE: Asian stocks tumbled while the dollar drifted near two-month lows on Tuesday as investors adopted a cautious approach ahead of a slate of U.S. data, including the jobs report, that may help gauge the trajectory for Federal Reserve policy next year. The defensive mood kept risk assets under pressure, including bitcoin , which hit a two-week low in the previous session and was steady at $86,407.53. Safe haven gold flirted with eight-week highs and bought $4,307.69 per ounce, up 0.15% on the day. On top of the combined U.S. employment reports for October and November due later on Tuesday, investors are also watching out for the inflation report on Thursday, although a number of key details will be missing after the longest government shutdown in history prevented data collection. In equity markets, MSCI’s broadest index of Asia-Pacific shares outside Japan was down 1% in early trading. Tokyo’s Nikkei and South Korea’s benchmark index both fell over 1%. Nasdaq futures and European futures fell 0.5%, pointing to wobbles at the open. Charu Chanana, chief investment strategist at Saxo, said the market is treating this week as a mini ‘reset’ of the U.S. macro narrative, with data on jobs, inflation and retail sales landing in a tight window that can quickly reprice rates. The Fed last week cut interest rates as expected and predicted one more rate cut in 2026 though markets are pricing in at least two more next year. “If the data is mixed to slightly softer, then the soft-landing narrative stays intact, but it may not be the kind of backdrop that sparks a big risk-on rally,” Chanana said. “The real risk is a hawkish surprise. If inflation or jobs print hotter, yields pop higher and risk assets, especially long-duration growth, feel it first.” Speculation has been rife over a possible frontrunner as Fed Chair Jerome Powell’s term ends in May. Expectations for a dovish Fed chair have also boosted bets for rate cuts next year. The focus this week will also be on policy decisions from the Bank of England, the European Central Bank and the Bank of Japan. The BoE is expected to cut rates, while the BOJ is likely to hike and broad consensus on the ECB is that rates will remain steady, although questions linger on whether a rate hike for Europe next year is on the cards. In currencies, the euro was at $1.1752, having touched its highest level since the start of October in the previous session. Sterling was a tad weaker at $1.3369. The dollar index , which measures the U.S. currency against six others, held steady at 98.295, but remained rooted near its lowest level in nearly two months. The Japanese yen firmed to 155.07 per U.S. dollar in early Asian hours ahead of the BOJ policy decision on Friday, with markets all but pricing in a rate hike - meaning the spotlight will be on any clues on what comes in 2026. “The market reaction will depend on the nuances of the BOJ’s communication and if Governor (Kazuo) Ueda can create a hawkish impression without being able to fully pre-commit on the timing of further hikes,” said Gregor Hirt, global CIO for multi asset at Allianz Global Investors. “There is a risk the BOJ stresses data dependence and opts to assess the effects of this hike before clearly signaling further moves, which markets may interpret as cautious or dovish.” In commodities, oil prices fell as investors considered disruptions linked to escalating U.S.-Venezuelan tensions with oversupply concerns and the impact of a potential Russia-Ukraine peace deal. Brent crude futures fell 0.4% to $60.32 a barrel, and U.S. West Texas Intermediate crude was at $56.6 a barrel, down 0.39%. Both contracts slid more than 4% last week, weighed down by expectations of a global oil surplus in 2026.