Most Asian stocks kept to a tight range on Wednesday, with Japanese shares retreating as soft trade data highlighted the impact of U.S. trade tariffs, while Australian stocks extended gains on a dovish RBA.
Regional markets took weak cues from a soft overnight finish on Wall Street, as the S&P 500 ran out of steam after a six-day run-up. S&P 500 Futures fell 0.2% in Asian trade.
Investors remained on edge over the U.S. economy after Moody’s downgraded its credit rating last week, while trade deals with Washington remained in focus.
A host of Federal Reserve officials warned that trade tariffs would underpin inflation and keep interest rates unchanged for longer.
Sentiment was also undermined by a report that Israel was planning to attack Iran’s nuclear facilities, a move that could drastically worsen geopolitical conditions in the Middle East.
Japan’s Nikkei dips as trade data shows tariff impact Japan’s Nikkei 225 index fell 0.3%, while the TOPIX was flat after data showed the country logged an unexpected trade deficit in April.
The deficit was largely spurred by a drop in export growth, while imports were also more resilient than expected after a bumper springtime wage hike.
Wednesday’s data highlighted the impact of high U.S. tariffs on Japanese trade, and comes just days before Japan is reportedly set to begin a third round of high-level trade talks with Washington.
3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads. But Tokyo has so far shown little intent in shifting from its demand that all U.S. suspend all trade tariffs against the country.
Australia stocks soar on commodity gains, dovish RBA Australia’s ASX 200 index rose 0.8% to a three-month high, extending gains from the prior session.
The ASX was boosted by gains in energy and gold stocks, as oil and bullion prices surged on a report that Israel was planning to attack Iran’s nuclear facilities.
Australian markets also remained heady after the Reserve Bank cut interest rates by 25 basis points on Tuesday, and flagged softer inflation and economic growth.
While the RBA did not commit to any further rate cuts, investors saw its outlook as largely dovish, which could herald more easing in the near-term.
China stocks rise, Beijing criticizes US chip controls China’s Shanghai Shenzhen CSI 300 and Shanghai Composite indexes rose 0.6% and 0.3%, respectively, while Hong Kong’s Hang Seng index added 0.7%.
Chinese markets extended gains after the People’s Bank cut lending rates further this week, loosening monetary conditions and providing more support for the economy. The rate cut also showed Beijing remained committed to supporting growth, which could herald more stimulus measures.
But concerns over strained U.S.-China relations limited gains in stocks, after China’s commerce ministry issued a new statement criticizing U.S. restrictions on Chinese computing chips. Beijing flagged particular objections to the U.S. attempting to outlaw the use of Huawei chips outside China.
3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads. China had recently warned that the U.S. chip controls threatened to undermine a recent trade truce between the two countries.
Broader Asian markets were mixed. South Korea’s KOSPI added 1%, while Singapore’s Straits Times index shed 0.2%.
Gift Nifty 50 Futures for India’s Nifty 50 index pointed to a muted open, after the index tumbled from a seven-month high over the past three sessions.
