Asian stock markets showed caution amid ongoing Sino-American trade tensions and anticipation of key U.S. employment data. The Nikkei index declined by 0.72%, while the Hang Seng and Shanghai composite indices experienced gains. Investor sentiment was influenced by quarterly earnings in Japan, with many companies beating expectations. The yen’s strength affected Japanese exporters negatively. Gold prices rose as a safe haven, and oil markets improved due to increasing Saudi crude prices linked to U.S. sanctions on Russia and Iran.
Asian Markets Face Uncertainty Amid Trade Tensions
On Friday, Asian stock markets displayed signs of hesitation as they grappled with ongoing Sino-American trade tensions and awaited the release of vital U.S. employment data. In Tokyo, the Nikkei index closed down by 0.72% at 38,787.02 points, while the broader Topix index fell by 0.54% to 2,737.23 points. Additionally, Sydney experienced a slight decline of 0.11%, and Seoul dropped by 0.58% in the latest trading sessions.
Investor Focus on U.S. Employment Report
After Wall Street’s cautious performance the previous day, investors shifted their focus to the imminent monthly employment report in the United States. This report has the potential to either bolster or challenge expectations surrounding the U.S. Federal Reserve’s monetary policy. As anticipation builds for this crucial release and a summit in Washington featuring Japanese Prime Minister Shigeru Ishiba and U.S. President Donald Trump, broker Kosuke Oka from Monex Securities cautioned that “the stock market in Tokyo is expected to remain unstable.”
As the quarterly earnings season unfolds in Japan, experts from Tokai Tokyo Intelligence noted that nearly two-thirds of listed companies have surpassed market expectations, prompting many to raise their forecasts. “These signs of hope will support the market,” they suggested.
The appreciation of the yen against the dollar has negatively impacted major Japanese exporting firms on the Tokyo Stock Exchange, as it diminishes their international competitiveness, with Toyota’s shares falling by 2.72%. The yen regained some ground on Friday at midday, trading at 151.77 yen to the dollar, a 0.23% decline from earlier levels, after a significant appreciation throughout the week due to anticipated interest rate hikes from the Bank of Japan.
Meanwhile, on the Hong Kong Stock Exchange, the Hang Seng index rose by 0.83% to 21,064.00 points around 06:30 GMT. In mainland China, the Shanghai composite index recorded a 0.51% gain, while the Shenzhen index increased by 0.98%.
Tech stocks provided a boost to the markets, fueled by optimism surrounding the success of Chinese AI company DeepSeek. In Hong Kong, consumer electronics powerhouses Lenovo and Xiaomi saw their shares surge over 6% after unveiling exciting new products, benefiting from advancements in artificial intelligence.
Relief washed over investors as U.S. tariffs on China rose less dramatically than initially threatened by Donald Trump, coupled with a moderate response from China. Economist Frédéric Neumann from HSBC remarked, “While a sudden agreement to eliminate these tariffs cannot be ruled out, it is more likely that even higher U.S. tariffs will ultimately be imposed on China.” He also noted that the increased uncertainty surrounding trade will likely impact cross-border direct investments.
As a testament to lingering market jitters, gold remained a favored safe haven, experiencing a rise of 0.11% to $2,859.48 per ounce around 06:30 GMT, staying close to its recent historical highs.
Additionally, the oil market showed signs of recovery, buoyed by climbing prices for Saudi crude oil exports to Asia, a direct result of U.S. sanctions against Russia and tightened measures targeting Iran. Around 06:30 GMT, U.S. WTI crude increased by 0.52% to $70.98 per barrel, while North Sea Brent rose by 0.63% to $74.75 per barrel.