Traders were also assessing the impact of a new, cheaper Chinese generative AI programme released last week that hit tech firms amid claims it can outperform big-name rivals such as ChatGPT.

Equities enjoyed a healthy run-up last week on the hope that Trump 2.0 will take a less hardball approach to global trade as he held off imposing stiff levies on China and other partners immediately on taking office, as he warned he would.

His comments that he would "rather not" hit Beijing, and a signal of openness to a trade deal added to the optimistic tone.

However, news Sunday that he would hit Colombian goods with a 25 percent tariff -- rising to 50 percent next week -- and revoke the visas of government officials set off alarm bells.

The move came after President Gustavo Petro blocked deportation flights from the United States. In response to Trump's decision Petro announced retaliatory levies of 25 percent on imports from the United States.

"Actions speak louder than words. The situation with Colombia just shows how little it takes for Trump to use tariffs as a negotiation tool," Dane Cekov at Sparebank 1 Markets.

Traders were already gearing up for a big week that will see the Federal Reserve hold its first policy meeting of the year.

While it is widely expected to hold rates, investors will be keeping a close eye on its statement and comments from Federal Reserve head Jerome Powell.

There is a concern that Trump's pledges to impose tariffs and slash taxes, immigration and regulations could reignite inflation and force the central bank to pause its rate cuts or even hike them again.

The move against Colombia sent the dollar up against most of its peers, piling on around one percent against the Mexican peso. Gold, a safe haven in times of uncertainty, was sitting just shy of its record high.

"This pivotal week kicks off in Asia, setting the stage for a global market spectacle intensely focused on the unfolding of... Trump's economic agenda amidst key inflation reports and anticipated Fed guidance," said Stephen Innes at SPI Asset Management.

He added that markets were bracing for "a torrent of earnings reports from companies constituting nearly 40 percent of the S&P 500's market capitalisation".

"Their outcomes could either amplify the recent bullish surge or instigate a reevaluation of market sentiments."

All three main indexes on Wall Street fell Friday, with the S&P 500 off a record high on profit-taking and as tech firms took a hit following the launch of the DeepSeek AI programme last week.

The programme's arrival has sparked competition fears, as tech titans -- including Nvidia, Meta and Alphabet -- have made huge investments worth hundreds of billions of dollars into AI products.

It also came on the heels of Trump's announcement of a new $500 billion venture to build infrastructure for artificial intelligence in the United States.

Tech and chip firms were among the big losers in Tokyo as the Nikkei ended the morning in negative territory, with Advantest down more than eight percent and Tokyo Electron off more than four percent.

SoftBank, which is a key investor in Trump's AI project, lost more than six percent.

There were also losses in Singapore, Wellington and Manila but Hong Kong and Shanghai rose.

- Key figures around 0300 GMT -

Tokyo - Nikkei 225: DOWN 0.6 percent at 39,699.76 (break)

Hong Kong - Hang Seng Index: UP 0.5 percent at 20,167.21

Shanghai - Composite: UP 0.3 percent at 3,262.62

Dollar/yen: DOWN at 155.60 yen from 155.93 yen on Friday

Euro/dollar: DOWN at $1.0462 from $1.0500

Pound/dollar: DOWN at $1.2445 from $1.2484

Euro/pound: UP at 84.08 pence from 84.06 pence

West Texas Intermediate: DOWN 1.2 percent at $73.75 per barrel

Brent North Sea Crude: DOWN 1.2 percent at $77.56 per barrel

New York - Dow: DOWN 0.3 percent at 44,424.25 (close)

London - FTSE 100: DOWN 0.7 percent at 8,502.35 (close)

dan/dhc

S&P Global Ratings

Nvidia

Meta

Alphabet Inc.

ADVANTEST

TOKYO ELECTRON

SOFTBANK GROUP

INDEX CORP.