Asia-Pacific stock markets began Thursday’s session with a mixed and cautious performance, as investors assessed the impact of new US tariffs on South Korea and eagerly awaited the outcome of the Bank of Japan’s latest policy meeting.
While some regional bourses managed to eke out gains, the overall mood was one of uncertainty, with Indian benchmarks like the Sensex poised for a lower start.
A key focus for investors this morning is the fallout from US President Donald Trump’s announcement of a blanket 15% tariff on South Korea’s exports to the United States.
This latest move in the ongoing trade saga has put South Korean markets under a microscope. As of 8:10 a.m. Singapore time, the Kospi index in South Korea had fallen 0.14%, while the small-cap Kosdaq was flat.
Japanese markets are also in the spotlight, with the country’s central bank widely expected to hold its short-term interest rates steady at 0.5% for the fourth consecutive time when its two-day policy meeting concludes later today.
While pre-market futures had suggested a higher open for Japan, the Nikkei 225 benchmark was up a modest 0.21% in early trade, with the broader Topix index ticking up 0.28%.
Elsewhere in the region, Australia’s S&P/ASX 200 benchmark fell 0.53%. Futures for Hong Kong’s Hang Seng index, however, had pointed to a weaker open.
The Fed’s stance: a cautious wait-and-see on tariffs
Investors are also still digesting recent comments from US Federal Reserve Chair Jerome Powell, who has made it clear that the central bank is in a holding pattern as it assesses the impact of President Trump’s tariff policies.
Powell stated that the Fed can afford to keep its interest rate steady while waiting to see if these tariffs push up inflation.
“Higher tariffs have begun to show through more clearly to prices of some goods, but their overall effects on economic activity and inflation remain to be seen,” Powell said.
He suggested that a “reasonable base case” could be that the effects on inflation will be “short lived.” However, he also issued a caution, noting that the levies could cause inflationary changes that are “more persistent.”
“Our obligation is to keep longer term … inflation expectations well anchored and to prevent a one-time increase in the price level from becoming an ongoing inflation problem,” Powell affirmed.
For the time being, we’re well positioned to learn more about the likely course of the economy and the evolving balance of risks before adjusting our policy stance. We see our current policy stance as appropriate to guard against inflation risks.
Indian markets brace for a gap-down start
Indian stock market benchmark indices, the Sensex and Nifty 50, are likely to open lower on Thursday.
The negative sentiment is being driven by news that US President Donald Trump has slapped 25% tariffs on Indian goods, a development that is expected to weigh heavily on the market.
The trends on Gift Nifty also indicate a gap-down start for the Indian benchmark index, with Gift Nifty trading around the 24,673 level, a significant discount of nearly 196 points from Nifty futures’ previous close.
This follows a session on Wednesday where the Indian stock market had ended higher, with the Nifty 50 closing above the 24,800 level.
The Sensex had rallied 143.91 points, or 0.18%, to close at 81,481.86, while the Nifty 50 settled 33.95 points, or 0.14%, higher at 24,855.05.
Nissan shares rebound despite reporting a loss
In corporate news, shares of Japanese automaker Nissan Motor surged by as much as 4.9% on Thursday, a surprising reversal from losses seen in its previous two sessions.
This rally came even as the company reported an operating loss of 79,124 million yen ($530.17 million) for its first fiscal quarter ended in June. The loss was attributed to lower sales volumes, adverse exchange rate movements, and the very U.S. tariffs that are currently unsettling the market.
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