Asian Markets Mixed as U.S. Trade Deadline, BOJ Decision Approach
Asian stock markets opened the week on a mixed note as investors remained cautious ahead of key economic events. The Nikkei 225 index slipped in Japan ahead of the Bank of Japan’s rate decision, while Hong Kong led regional gains, boosted by optimism over the U.S.–EU trade agreement.
Despite positive momentum from the trade deal, most Asian markets made only modest moves as traders eyed the upcoming August 1 tariff deadline set by U.S. President Donald Trump.
Gains in the region were also supported by Wall Street’s strong finish last week, where the S&P 500 and Nasdaq both closed at new record highs. U.S. stock index futures extended those gains during Asian hours.
Investors globally are now watching for the Federal Reserve’s interest rate decision, which begins Tuesday, as well as corporate earnings from major tech firms like Apple (NASDAQ:AAPL) and Microsoft (NASDAQ:MSFT).
U.S.–EU Trade Pact Lifts Sentiment; U.S.–China Talks Underway
Broader market sentiment improved after the U.S. and European Union announced a new trade framework on Sunday. The deal imposes a 15% tariff on European goods, down from the previously threatened 30%.
Meanwhile, senior U.S. and Chinese officials are meeting in Stockholm on Monday. They aim to extend the current tariff truce by three months, ahead of the August 12 expiration.
A report from the South China Morning Post said both sides are unlikely to introduce new duties or escalate trade tensions.
China and Regional Markets See Mixed Results
Chinese markets opened higher but lost momentum:
- Shanghai Composite dipped 0.2%
- CSI 300 index also fell 0.2%
In contrast, Hong Kong’s Hang Seng index rose 0.5% after gaining more than 1% in early trade.
Other regional moves:
- South Korea’s KOSPI was flat
- Samsung Electronics (KS:005930) surged 3% after confirming a $16.5 billion chip supply deal. A Bloomberg report linked the buyer to Tesla (NASDAQ:TSLA).
- Australia’s ASX 200 rose 0.3%
- Singapore’s Straits Times Index edged 0.2% lower
- India’s Nifty 50 slipped slightly
- Philippines’ PSEi Composite gained 1.3%
Japan’s Nikkei Falls as BOJ Meeting Nears
Japan’s Nikkei 225 dropped 1%, retreating from last week’s one-year highs. The broader TOPIX index was also down 0.5%.
The Bank of Japan is expected to keep its policy rate unchanged at 0.5% during its meeting on Thursday.
However, analysts suggest the central bank may deliver a less pessimistic economic outlook following the recent U.S.–Japan trade deal, possibly signaling future rate hikes in late 2025.
In a note, ING analysts said the trade agreement removed a major source of uncertainty for the BOJ. They also noted that upward revisions in inflation forecasts could give markets clues about the short-term rate trajectory.
