Asian shares are mixed after US stocks fall on weakened hopes for a September interest rate cut
Japan's Nikkei 225 rose 0.9% to 41,020.91 after the Bank of Japan kept interest rates steady at 0.5% and raised inflation projections. The move follows Tokyo's trade deal with Washington.
Hong Kong's Hang Seng index fell 1% to 24,920.67, while the Shanghai Composite Index slid 0.7% to 3,588.73.
In Seoul, the Kospi edged down 0.3% to 3,244.40 after South Korea reached a 15% tariff deal with the U.S., with no levies on American goods like cars, trucks and farm products. The deal also includes South Korea's purchase of $100 billion U.S. energy imports and $350 billion worth of investments in the U.S.
Australia's S&P ASX 200 shed 0.1% to 8,743.80. India's BSE Sensex added 0.2% to 81,481.86. Taiwan's TAIEX rose 0.4% to 23,551.92.
Rabo Bank, citing the U.S. trade deals with other countries, including Bangladesh, said in a commentary that 'it appears to be only a matter of time before India agrees to terms to ensure that it retains favorable access to the US market and all of those other markets that (U.S. President Donald) Trump has demonstrated he has the power to direct through economic coercion.'
Rabo added that the terms of a U.S.-India trade deal would almost certainly include Indian purchases of U.S. arms and energy products and preferential access to U.S. agricultural goods.
'A potential loser in all of this is Australia. With the US sending more wheat to Indonesia and Bangladesh and more LNG to Japan and South Korea, Australian exports stand to be displaced from their traditional markets,' it added.
Trump on Wednesday announced a 25% tariff on imports coming from India, along with an additional tax because of India's purchases of Russian oil, beginning on Aug. 1. That's when stiff tariffs Trump has proposed for many other countries are also scheduled to kick in, unless they reach trade deals that lower the rates. But the U.S. president said the two countries were still in negotiations.
On Wall Street on Wednesday the S&P 500 edged down by 0.1%, coming off its first loss after setting all-time highs for six successive days. The Dow Jones Industrial Average dropped 171 points, or 0.4%, and the Nasdaq composite rose 0.1%.
Stocks felt pressure from rising Treasury yields in the bond market after the Federal Reserve voted to hold its main interest rate steady. The move may upset Trump, who has been lobbying for lower interest rates, but it was widely expected on Wall Street.
Fed Chair Jerome Powell may have surprised investors by pushing back on expectations that the Fed could cut rates at its next meeting in September. Besides Trump, two members of the Fed's committee have also been calling for lower rates to ease the pressure on the economy, and they dissented in Wednesday's vote.
But Powell would not commit to a September cut in rates, pointing to how inflation remains above the Fed's 2% target, while the job market still looks to be 'in balance.'
A cut in rates would give the job market and overall economy a boost, but it could also risk fueling inflation when Trump's tariffs may be set to raise prices for U.S. consumers. The Fed's job is to keep both the job market and inflation in a good place.
In other dealings on Thursday, U.S. benchmark crude oil lost 4 cents to $69.96 per barrel while Brent crude, the international standard, shed 13 cents to $72.34 per barrel.
The U.S. dollar fell to 148.87 Japanese yen from 149.44. The euro rose to $1.1422 from $1.1412.
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Yahoo
16 minutes ago
- Yahoo
What a weaker dollar means for inflation
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Moreover, when you take a look at import prices, especially import prices ex petroleum, it tells the tale. We're going to see more inflation and a weaker dollar going forward. Does Trump want a strong dollar? I would think he does, and I think, well, I think like all politicians, he wants to have his cake and eat it, too. He doesn't want de-dollarization, clearly, but he wants a weaker dollar because A, it really tends to juice the tech sector, and B, it will provide relief to the beleaguered manufacturing sector that's been in an effective recession for the past couple of years. Is it too soon to say the kind of impact the softer dollars had during this earnings season, particularly what it's meant for the multinationals? It's way too early to jump on that bandwagon. I think we're really going to be talking in the fourth quarter earnings, and then next year. Moreover, a lot of those firms that he wants to help are actually having real problems with the tariff issue because, you know, 45% of everything we import goes into domestic manufacturing. So policies at a cross purposes, a good portion of the time this year, which is why that economy slowed to 1.2% growth in the first half of the year, and we think it's not going to do much better. Our forecast for this year is 1.1%. Can I ask you when we talk about these tariff policies? We've been talking about them all show. There's the near to intermediate impact, but how long do we have to wait to see what the long-term impact is? Meaning, do I have to wait till does it have to be August 2026, and Joe and Josh are back on set for me to really know, okay, it's really boosted manufacturing job. It's really opened up all these new markets for American business. It's really raised this much revenue. It's a little worse, actually. So as of midnight last night, on once we get to October 5th, we're going to have an effective 18.3% tariff. The real problem is we won't really understand what any of this means, not till October 5th, 2026, but more like October 5th, 2027. Why? Why do you say that, Joe? Because it takes so long to pass through the tariff costs. You know, there are four points along the chain. You've got your retail, you've got your consumers, you've got your importers, and you've got your exporters. At each point of the supply chain, you're going to see a bit of it absorbed, a bit of it eaten. When we went through this in 2018, for example, we didn't see the full price of the increase in the price of washing machines, dryers, and dishwashers caused by tariffs show up on consumers' balance sheets until about two years later. Turned out 90% of that cost was eaten entirely by consumers. 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The Fed Announced Interest Rates Will Hold Steady. Here's How That Could Affect Crypto Prices for the Second Half of 2025.
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Here's How That Could Affect Crypto Prices for the Second Half of 2025. was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
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Ernst highlights a major problem: Cost overruns are no big thing in Washington
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