Asian markets dropped as U.S. President Donald Trump's push to acquire Greenland rattled global investors. Japan’s Nikkei fell despite Prime Minister Sanae Takaichi announcing a snap election and fresh fiscal stimulus plans.

The spat over Greenland chilled risk appetite, with European allies rejecting Trump’s demands and warning of economic retaliation. Uncertainty around funding Japan’s increased spending also pressured government bonds, sending yields above 4%.

Broader Asian equities retreated, with China’s CSI 300 and Hong Kong’s Hang Seng slipping despite Beijing meeting its 5% growth target. Australia’s ASX dragged after BHP flagged lower commodity prices, while South Korea’s Kospi held steady near record highs.

Investors are watching for further geopolitical flare-ups and market volatility. Analysts warn that Trump’s aggressive stance could weigh on global trade and investor sentiment in the weeks ahead.