SINGAPORE - Asian stocks began the year on a dour note on Thursday as they struggled for traction after a jittery close to 2024, while the US dollar held steady and investor sentiment stayed cautious ahead of Donald Trump's return to the White House.

The start of the New Year was shaping up to be a less favorable one for equities, as uncertainty over the policies of incoming US President Trump and a more hawkish Federal Reserve outlook looked set to dominate the market rhetoric for now.

While global shares closed out 2024 with a strong yearly gain of nearly 16 percent, they had clocked a monthly loss of more than 2 percent in December.

The same was the case for MSCI's broadest index of Asia-Pacific shares outside Japan, which slid 1.2 percent in December though registered a gain of more than 7 percent for 2024.

The index was last down 0.58 percent in the Asian session on Thursday, with volume thinned given a trading holiday in Japan.

However, stock futures pointed to a positive opening for Europe and Wall Street.

EUROSTOXX 50 futures gained 0.74 percent, while FTSE futures ticked 0.05 percent higher.

S&P 500 futures edged 0.48 percent higher. Nasdaq futures advanced 0.67 percent.

"I think we're now in a bit of a twilight zone between now and January 20," said IG market analyst Tony Sycamore.

Trump will be sworn in as president of the United States on Jan 20 for his second term in office.

"It's very unusual for stocks not to get a positive December ... and that worries me a little bit, because when markets don't go up at times like this when they should be going up, it generally means that there are other concerns," said Sycamore.

"There's a pretty common consensus out there that Trump's going to run the economy red hot."

Elsewhere, South Korea's KOSPI was flat. The index was Asia's worst performer in 2024, with a loss of more than 22 percent in dollar terms owing in part to a deepening political crisis.

Dollar steady

All that global uncertainty, along with expectations of fewer Fed interest rate cuts this year, left the safe-haven dollar hovering near a two-year peak on Thursday.

A wide interest rate difference between the US and other economies has cast a shadow over the foreign exchange market, resulting in most currencies declining sharply against the dollar in 2024.

The dollar rose 0.14 percent to last trade at 157.18 yen, leaving the Japanese currency sliding toward its lowest level in more than five months.

The euro ticked 0.08 percent higher to $1.03615 but strayed not too far from a more than one-month trough.

Markets are now pricing in about 42 basis points worth of rate cuts from the Fed this year, compared with more than 100 bps from the European Central Bank and 60 bps from the Bank of England.

"We now expect the Fed to make just two 25 bps cuts in 2025 by skipping cuts in January and May, and instead cutting in March and possibly June," said Eli Lee, chief investment strategist at Bank of Singapore.

Trading of cash US Treasuries was closed on Thursday owing to the Japan market holiday, but futures were little changed.

"We see further upward pressure on long-dated US Treasury yields and have a 12-month 10Y UST yield forecast of 5.00 percent," said Lee.

In commodities, oil prices nudged higher on Thursday, with Brent crude futures up 0.25 percent to $74.83 a barrel. US West Texas Intermediate crude gained 0.28 percent to $71.92.

Spot gold traded 0.34 percent higher at $2,632.68 an ounce. The yellow metal had a banner year in 2024, surging more than 27 percent in its largest annual gain since 2010.