Asia-Pacific Markets Mixed Amid Global Trade Uncertainty

Asia-Pacific markets saw mixed performance on Tuesday as investors weighed the global trade landscape following U.S. President Donald Trump’s decision to delay 50% tariffs on European Union imports.

Japan led gains, with the Nikkei 225 rising 0.51% to close at 37,724.11, and the broader Topix gaining 0.64% to 2,769.49.

In South Korea, the Kospi dipped 0.27% to 2,637.22, pulling back from a three-month high, while the smaller Kosdaq edged up 0.25% to 727.11.

Mainland China’s CSI 300 slipped 0.52% late in the session, but Hong Kong’s Hang Seng Index reversed early losses to finish up 0.39%, buoyed by stronger industrial profit data showing a 1.4% increase in April, up from 0.8% in March.

India’s markets were in the red, with the Nifty 50 falling 0.69% and the BSE Sensex down 0.22%.

Meanwhile, Australia’s S&P/ASX 200 rose 0.56% to 8,407.6, marking its third straight positive day.

U.S. Futures Rally as Tariff Delay Offers Relief

While U.S. markets were closed Monday for Memorial Day, futures pointed to a strong open. Dow Jones futures surged 1% (407 points), S&P 500 futures rose 1.1%, and Nasdaq 100 futures climbed 1.3% in response to the EU tariff delay.

Bond Market: Japan’s Long-Term Yields Slide

In Japan, super-long bond yields dropped sharply on reports the Finance Ministry may reduce their issuance. As of mid-afternoon:

• 30-year JGB yield dropped to 2.859%
• 20-year yield fell to 2.351%
• Shorter-term bonds saw modest gains

This move reflects speculation about a shift in Japan’s debt issuance strategy.

Currency Update: Asian Currencies Rally as Dollar Weakens

Asian currencies extended gains as the U.S. dollar index dropped to 98.882, amid concerns over rising U.S. debt levels following Trump’s tax bill:

• Japanese yen strengthened 0.31% to 142.40
• Taiwanese dollar rose for the sixth day, now at 29.879
• Malaysian ringgit appreciated 0.17% to 4.2080
• South Korean won remained flat at 1,368.12

Bubble Tea Stocks in Hong Kong Surge

Shares of Chinese bubble tea brands rallied:

• Mixue jumped up to 9.21%
• Nayuki gained 4.55%
• Sichuan Baicha Baidao surged 7.79%
• Guming climbed 7.85%

Investor optimism continues around the sector’s growth potential and global expansion.

Japan Loses Long-Held Top Creditor Spot

After 34 years, Japan was overtaken by Germany as the world’s top creditor nation:

• Japan’s net external assets hit ¥533.05 trillion ($3.73 trillion) in 2024
• Germany surpassed it with €3.5 trillion ($3.78 trillion)

Rising Japanese interest rates and a shift in investment focus contributed to the shift.

Meituan Shares Hit 8-Month Low Amid Competition

Meituan stock dropped up to 5.49%, hitting an eight-month low, following the company’s warning of tough competition in the instant retail sector. Despite 18% year-on-year revenue growth, CEO Wang Xing cautioned about financial uncertainty for the rest of the year.

HSBC maintained a buy rating but trimmed its price target from HK$165 to HK$160, citing competitive pressures.

BYD Slides Again After Price Cuts

BYD shares continued their decline, falling 2.96% on Tuesday after a 9% drop the previous day. The slump follows investor concerns after the EV giant announced major price cuts on May 23.

Gold Loses Shine Amid Market Optimism

Spot gold remained flat at $3,343.91/oz after falling 0.7% on Monday. The safe-haven asset took a hit as investor confidence in stocks and riskier assets returned with the EU tariff delay.