STOCKS in Asia declined after South Korea’s political turmoil triggered by a brief imposition of martial law caught global investors off guard.

The benchmark Kospi Index fell as much as 2.3% on Wednesday after South Korea-related assets all dropped overnight. Equities opened lower in Hong Kong and mainland China, and also slipped in Tokyo. The won advanced after losses overnight in offshore trading.

South Korean President Yoon Suk Yeol’s sudden declaration of martial law on Tuesday — which was later revoked — looks set to test his political future. The surprise move by a major economy and pillar of global trade increased caution among investors in Asia, at a time when Donald Trump’s imminent return and China’s economic woes have already hurt sentiment.

“We expect some volatility today,” said Jung In Yun, chief executive at Fibonacci Asset Management Global Pte. “Short term, this will be a buy opportunity. Long-term, the Korea discount problems will persist and act as a headwind for growth.”

The iShares MSCI South Korea exchange-traded fund sank as much as 7.1% in US trading. Shares of Samsung Electronics briefly tumbled 3% in Seoul. Bank of Korea’s monetary board, which unexpectedly cut the key rate last week, held an extraordinary meeting to discuss steps to shield the economy and markets.

“There’s certainly some lingering uncertainty – but the quick response from Korean authorities means that impact on the region could remain limited,” said Charu Chanana, chief investment strategist at Saxo Markets.

The People’s Bank of China extended its support for the yuan by setting the daily reference rate significantly stronger than the average estimate. The currency fell to a one-year low in the previous session.

Elsewhere in Asia, the Aussie dollar fell after Australia’s economic growth remained sluggish in the three months through September.

Treasury 10-year yields were little changed at 4.23% after rising three basis points in the previous session. US equity futures edged higher in Asia trading after S&P 500 eked out gains to notch another record.

Global investors are looking to this week’s US payrolls report and Jerome Powell’s remarks for clues on whether the Federal Reserve will cut rates in December. The latest data showed US job openings picked up while layoffs eased, suggesting demand for workers is stabilizing. Fed Bank of San Francisco President Mary Daly said a rate cut this month isn’t certain, but remains on the table.

“The question for investors isn’t ‘will the Fed cut again’ but rather ‘will the next cut be in December or January’,” said Lauren Goodwin at New York Life Investments. “Our base case is that the Fed cuts 25 basis points in December, but we have much higher confidence that another cut is coming in December or January as the data evolves.”

The euro was little changed with all eyes on the political standoff in France. President Emmanuel Macron called on French lawmakers to set aside their personal ambition and reject a vote that would topple the government and throw the country into political turmoil.

Oil steadied after the biggest advance in more than two weeks. Gold stabilized after rising on Tuesday as political turmoil in South Korea and France buoyed demand for haven assets. –BLOOMBERG