Asia shares, yen look past Japan politics as earnings loom
Investors were also hoping for some progress in trade talks ahead of President Donald Trump's August 1 tariff deadline, with U.S. Commerce Secretary Howard Lutnick still confident a deal could be reached with the European Union.
There were reports Trump and Chinese leader Xi Jinping were closer to arranging a meeting, though likely not until October at the earliest. European Commission President Ursula von der Leyen has stolen a march and will meet with Xi on Thursday.
In Japan, the ruling coalition lost control of the upper house in an election on Sunday, further weakening Prime Minister Shigeru Ishiba's grip on power as a tariff deadline looms.
Ishiba expressed his intention to stay in the position, which along with a market holiday, limited the reaction and the yen was 0.4 per cent firmer at 148.29 to the dollar.
"Ishiba will try to govern with support from some within the opposition, but this likely means a looser fiscal policy and is not good news for bond yields," said Rodrigo Catril, a senior FX strategist at NAB.
"History also suggests that domestic political uncertainty tends to keep the BOJ on the sidelines, so the prospect of rate hikes is now set to be delayed for a little bit longer."
The Bank of Japan still has a bias to raise rates further but markets are pricing little chance of a move until the end of October.
While the Nikkei was shut, futures traded at 39,820 and in line with the cash close of 39,819.
MSCI's broadest index of Asia-Pacific shares outside Japan eased 0.1 per cent, while South Korean stocks added 0.5 per cent.
Chinese blue chips firmed 0.3 per cent as Beijing kept interest rates unchanged as widely expected.
MEGA CAPS KICK OFF
EUROSTOXX 50 futures and DAX futures both dipped 0.3 per cent, while FTSE futures lost 0.1 per cent.
S&P 500 futures and Nasdaq futures both edged up 0.1 per cent, and are already around record highs in anticipation of more solid earnings reports.
A host of companies reporting this week include Alphabet and Tesla, along with IBM.
Investors also expect upbeat news for defence groups RTX, Lockheed Martin and General Dynamics. Ramped up government spending across the globe has seen the S&P 500 aerospace and defence sector rise 30 per cent this year.
In bond markets, U.S. Treasury futures held steady having dipped late last week after Federal Reserve Governor Christopher Waller repeated his call for a rate cut this month.
Most of his colleagues, including Chair Jerome Powell, have argued a pause is warranted to judge the true inflationary impact of tariffs and markets imply almost no chance of a move in July. A September cut is put at 61 per cent, rising to 80 per cent for October.
Powell's reticence on rates has drawn the ire of Trump who threatened to fire the Fed chief, before backing down. The spectre of a potential political appointee who would seek to ease policy sharply has investors on edge.
The European Central Bank meets this week and is expected to hold its rates steady at 2.0 per cent following a string of cuts.
"The press conference will likely keep highlighting uncertainty and need to wait for tariff negotiations to conclude before deciding the next step," said analysts at TD Securities in a note. "Similarly, its 'meeting-by-meeting' language would be retained in the release."
The euro was unchanged at $1.1622 in early trading, having dipped 0.5 per cent last week and away from its recent near-four-year top of $1.1830. The dollar index was a fraction firmer at 98.465.
In commodity markets, gold was little changed at $3,348 an ounce with all the recent action in platinum which last week hit its highest since August 2014.
Oil prices were caught between the prospect of increased supply from OPEC+ and the risk European Union sanctions against Russia for its war in Ukraine could curb its exports.
Brent edged up 0.1 per cent to $69.36 a barrel, while U.S. crude added 0.2 per cent to $67.45 per barrel.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
CNA
an hour ago
- CNA
South Korea seeks mutually agreeable US trade package as Aug 1 tariff deadline looms
SEOUL: South Korea will prepare a trade package that is mutually agreeable with the United States ahead of minister-level meetings planned next week and a US tariff-pause deadline of Aug 1, the presidential office said on Saturday (Jul 26). The package will include shipbuilding cooperation, a sector of high interest to US Commerce Secretary Howard Lutnick, who discussed the matter with South Korea's Industry Minister Kim Jung-kwan on Friday, it said in a statement. Friday's meeting was a follow-up to a meeting on Thursday, where Lutnick and Kim reaffirmed their commitment to reach a trade deal by Aug 1, after a joint meeting of finance ministers and top trade envoys that had been scheduled for Friday was postponed. South Korea, facing 25 per cent tariffs, is rushing to reach a trade deal with Washington, with National Security Adviser Wi Sung-lac visiting the US recently for high-level talks and Minister for Trade Yeo Han-koo also in the US for negotiations, as pressure grows on officials to clinch a deal that is no worse than Japan's that cut tariffs to 15 per cent. South Korea's trade negotiations with the US have included non-tariff barriers in the agricultural and digital service sectors, but foreign exchange has not been part of trade talks beyond usual consultations, according to South Korean officials. US President Donald Trump arrived in Scotland on Friday for bilateral talks with European Commission President Ursula von der Leyen on Sunday, which could yield a trade deal with the European Union, after making a deal earlier this week with Japan and the Philippines. Next week, US officials will hold a new round of trade talks with China in Sweden for an extension to a separate deadline of Aug 12 set between the two countries. South Korea's Finance Minister Koo Yun-cheol and Foreign Minister Cho Hyun will also hold meetings with US Treasury Secretary Scott Bessent and State Secretary Marco Rubio, respectively, next week.
Business Times
5 hours ago
- Business Times
Nasa says thousands of employees set to resign from space agency
[WASHINGTON] National Aeronautics and Space Administration (Nasa) will lose roughly 3,870 employees through a voluntary resignation programme, part of a broad push from US President Donald Trump's administration to reduce the federal workforce. The numbers are subject to change as Nasa reviews applications, including if an employee withdraws from the programme or a resignation is not approved, the US space agency said on Friday (Jul 25). 'Safety remains a top priority for our agency as we balance the need to become a more streamlined and more efficient organisation and work to ensure we remain fully capable of pursuing a Golden Era of exploration and innovation, including to the Moon and Mars,' Nasa said. Nasa has offered employees two separate opportunities in 2025 to leave through the government's Deferred Resignation Programme. The agency said its expected remaining civil servant workforce would be about 14,000 people, following both resignation programmes, as well as normal attrition of about 500 people over the same time period. The first round came during the start of the Trump administration when federal workers received e-mails offering them the opportunity to take a buyout, an effort spearheaded by the Elon Musk-helmed Department of Government Efficiency. About 870 people, or 4.8 per cent of the Nasa workforce, took the offer then. Nasa initiated its own second round of deferred resignation beginning in early June, with a deadline to opt in by Jul 25. About 3,000 personnel, or 16.4 per cent of the workforce, took it up, the agency said on Friday. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Executives at the space agency, who have been working to reduce headcount to comply with the Trump administration's goal of shrinking the federal workforce, have spearheaded deferred resignation as a way to avoid layoffs. 'The reason we are doing this is to minimise any involuntary workforce reductions in the future,' Nasa's former acting administrator Janet Petro said during an agency town hall on Jun 25, according to an audio recording obtained by Bloomberg. 'That is our whole goal, minimising that.' Nasa had sought a 'blanket waiver' in February to save all of the agency's probationary employees from layoffs. The prospect of a mass exodus of employees from Nasa has raised alarm bells within the industry and at the agency, with some experts arguing that the cuts will cause Nasa to lose some of its best talent. In a letter to newly appointed Nasa interim administrator Sean Duffy titled The Voyager Declaration, hundreds of former and current employees warned Duffy, who is also the head of the Transportation Department, that workforce reductions could jeopardise the safety and efficiency of operations. 'Thousands of Nasa civil servant employees have already been terminated, resigned or retired early, taking with them highly specialised, irreplaceable knowledge crucial to carrying out Nasa's mission,' they wrote in the letter to Duffy. BLOOMBERG
CNA
5 hours ago
- CNA
China's Premier Li Qiang proposes global AI cooperation organisation
SHANGHAI: Chinese Premier Li Qiang on Saturday (Jul 26) proposed establishing an organisation to foster global cooperation on artificial intelligence, calling on countries to coordinate on the development and security of the fast-evolving technology. Speaking at the opening of the annual World Artificial Intelligence Conference (WAIC) in Shanghai, Li called AI a new engine for growth, but added that governance is fragmented and emphasised the need for more coordination between countries to form a globally recognised framework for AI. The three-day event brings together industry leaders and policymakers at a time of escalating technological competition between China and the United States - the world's two largest economies - with AI emerging as a key battleground. "Currently, overall global AI governance is still fragmented. Countries have great differences, particularly in terms of areas such as regulatory concepts, institutional rules," Li said. "We should strengthen coordination to form a global AI governance framework that has broad consensus as soon as possible," he said. Washington has imposed export restrictions on advanced technology to China, including the most high-end AI chips made by companies such as Nvidia and chipmaking equipment, citing concerns that the technology could enhance China's military capabilities. Despite these restrictions, China has continued making AI breakthroughs that have drawn close scrutiny from US officials. Li did not name the United States in his speech, but he warned that AI could become an "exclusive game" for a few countries and companies, and said challenges included an insufficient supply of AI chips and restrictions on talent exchange. China wanted to share its development experience and products with other countries, especially those in the Global South, Li said. WAIC is an annual government-sponsored event in Shanghai that typically attracts major industry players, government officials, researchers and investors. Tesla CEO Elon Musk, who has in past years regularly appeared at the opening ceremony both in-person and via video, did not speak this year. Besides forums, the conference also features exhibitions where companies demonstrate their latest innovations. This year, more than 800 companies are participating, showcasing more than 3,000 high-tech products, 40 large language models, 50 AI-powered devices and 60 intelligent robots, according to organisers. The exhibition features predominantly Chinese companies, including tech giants Huawei and Alibaba and startups such as humanoid robot maker Unitree. Western participants include Tesla, Alphabet and Amazon.
