Asian stock markets experienced a downturn on Tuesday, January 20, 2026, as investors reacted to escalating geopolitical tensions stemming from US President Donald Trump's demands for Greenland and new tariffs on European nations. Trump recently threatened a 10% import tax, escalating to 25%, on eight European countries that oppose US control of Greenland, prompting widespread concern over a potential US-Europe trade war. The Danish and Greenlandic governments have firmly rejected any US takeover, with Greenland's prime minister affirming allegiance to Denmark and NATO. Simultaneously, Japanese shares, including the Nikkei 225 and TOPIX indexes, declined by approximately 1% despite Prime Minister Sanae Takaichi's announcement of dissolving parliament for a snap election on February 8. While a snap election initially offered hopes for further fiscal stimulus, doubts quickly emerged regarding how the increased spending would be funded, leading to a sharp sell-off in Japanese government bonds and rising yields. This political gamble, coupled with existing economic concerns, contributed to investor caution. The broader market sentiment saw safe-haven assets like gold and silver reaching record highs, while the US dollar struggled, and Asian-Pacific markets largely retreated. Futures for India's Nifty 50 also registered a fall, indicating the global reach of these market-moving events. The confluence of the Trump-Greenland spat and Japan's political uncertainty created a risk-off environment across global markets.