Asia: Stocks mixed with trade and earnings in focus; Tokyo reopens with gains
Japanese stocks edged up and the yen held gains after Prime Minister Shigeru Ishiba said he will stay in power despite the weekend election debacle.
Investors took a more cautious path after a largely positive day on Wall Street, where the S&P ended above 6,300 points for the first time and the Nasdaq chalked up yet another record.
Equities continue to rally on expectations key trading partners will strike agreements with Washington before Aug 1 to avoid Donald Trump's sky-high tariffs, with the US president saying several deals were close. Just three have been struck so far.
His press secretary Karoline Leavitt said more could be reached before next Friday but also warned the president could unveil fresh unilateral tolls in that time.
While Trump's initial tariff bombshell on April 2 rattled global markets before he delayed introducing the measures twice, they have seen more muted reactions to successive threats as traders expect him to eventually row back again.
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
That optimism has been helped by data indicating the US economy remained healthy despite the imposition of other levies that are beginning to be felt on Main Street.
And SPI Asset Management's Stephen Innes warned traders could be in for a shock next week.
'The new tariff regime isn't being priced - full stop,' he wrote.
'Markets have seen this movie before: tough talk, last-minute extensions, and deal-making in overtime. But this time, Trump isn't bluffing. He's already posted 'No extensions will be granted'.
'The new rates - 30 per cent on the EU, 35 per cent on Canada, 50 per cent on Brazil - are politically loaded and economically radioactive. If they go live, there's no soft landing.'
Hong Kong has been the standout in Asia this year, piling on around a quarter thanks to a rally in Chinese tech firms and a fresh flow of cash from mainland investors.
And the Hang Seng Index continued its advance on Tuesday, with Shanghai, Sydney and Taipei also up.
There were losses in Singapore, Seoul, Wellington and Manila.
Tokyo rose as investors returned from a long weekend to news that Ishiba would remain in power even after his ruling coalition lost its majority in Japan's lower house elections Sunday, months after it suffered a similar fate in the upper house.
His refusal to leave helped the yen push higher against the dollar and other peers, though observers warned the government's tenure remained fragile and investors remained nervous.
The yen strengthened to 147.08 Tuesday before paring some of the gains. That compares with 148.80 Friday.
But Franklin Templeton Institute's Christy Tan said that 'Ishiba now faces heightened political headwinds, including pressure over inflation, taxes, and US trade talks'.
Focus also turns this week to earnings from some of the world's biggest names, including Tesla, Google-parent Alphabet, General Motors, Intel and Coca-Cola.
While there will be plenty of attention given to the results, the firms' guidance will be key as investors try to gauge companies' pulses in light of Trump's trade war. AFP
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Times
10 minutes ago
- Business Times
South Korea pitches Trump on shipyards for last-minute trade deal
[SEOUL] South Korea is pitching the US on a shipbuilding partnership as a key proposal to seal a last-minute agreement to avoid a 25 per cent tariff rate. While details remain unclear, Yonhap News reported that South Korea has proposed a multi-billion dollar project dubbed 'Make American Shipbuilding Great Again'. South Korea's Industry Ministry declined to comment. 'We confirmed the US side's strong interest in the shipbuilding sector and the two countries agreed to work together to develop mutually acceptable terms that include shipbuilding cooperation,' South Korea's presidential office said on Saturday (Jul 26). As countries across Asia clinched deals last week, Seoul's negotiators have been racing to stay engaged with their US counterparts as Washington shifted its focus to the European Union and China. The US and EU announced a pact on Sunday that will see the bloc face 15 per cent tariffs on most of its exports to the US, including automobiles. The latest agreement, which follows a Japan deal last week, adds to the pressure on Asia's fourth-largest economy to clinch a deal. South Korea, where negotiations have been slowed by internal political turmoil, is one of the biggest Asian economies to still be without a deal. Aside from China, other major exporters in the region that are in the thick of negotiations include India and Taiwan. South Korea's finance and foreign ministers are set to meet with their US counterparts this week in a last-minute bid to close the negotiations and the government in Seoul has said the two countries are committed to making a deal before US President Donald Trump's Aug 1 deadline. 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 Also on the table is increased access to South Korea's agricultural market, as well as a fund to invest in American projects similar to an agreement Japan struck. Under the deal, the two sides touted a US$550 billion fund as part of the agreement on the tariff rate dropping to 15 per cent. The South Korean talks are similarly focused on reaching a 15 per cent tariff rate, including for autos, and the recent proposals suggest a comparable structure. Putting agricultural imports on the table raises the stakes for South Korea's new government. Past efforts to open the country's beef market sparked nationwide protests and any shift on rice imports could face even stiffer resistance. Barring a deal, Bloomberg Economics estimates a 1.7 per cent hit to South Korea's gross domestic product, with market volatility and uncertainty threatening to push the GDP losses beyond that. Overseas shipments were equivalent to more than 40 per cent of South Korea's GDP last year. 'Japan's trade deal paints a positive backdrop but also sets a high bar for others,' Morgan Stanley economist Kathleen Oh said in a note last week. 'Korea and Taiwan may need to ramp up new investment schemes to increase agricultural and energy imports and expand market access, as seen in Japan's case.' BLOOMBERG
Straits Times
32 minutes ago
- Straits Times
Boeing emerges as a winner in Trump's trade wars
US President Donald Trump and President and CEO of Boeing Kelly Ortberg attending a roundtable discussion in Doha, Qatar, in May. WASHINGTON - There are typically not many winners in a trade war, but Boeing appears to be reaping some rewards from the one started by US President Donald Trump. The aerospace company has received a steady stream of new orders as part of trade deals between the United States and other countries. These sales could be a boon for Boeing as it emerges from years of bruising crises. They also allow Mr Trump to claim that his unconventional trade policies are helping American manufacturing. Orders for hundreds of Boeing jets have been announced in deals with Indonesia and Japan in Jult, as well as Bahrain, the United Arab Emirates, Saudi Arabia and Qatar earlier in 2025. 'Ever since his first term, his trade deals have generally involved these kinds of purchase agreements,' said Mr Bruce Hirsh, a trade policy expert at Capitol Counsel, a lobbying firm in Washington that has clients in the aerospace industry. 'Our trading partners know this, so they're looking for these kinds of big-ticket items that they can offer to purchase.' Some aviation analysts are sceptical that US trade negotiators had to twist arms to persuade countries to buy Boeing planes. Airlines, including those controlled by foreign governments, plan such expensive purchases carefully and over months, if not years. Moreover, airlines have few choices, since Boeing and Airbus of France are the only two suppliers of large commercial jets. Still, those experts said, it was not surprising that Mr Trump and his aides have made a point of highlighting new Boeing orders as part of their trade deals. The company employs tens of thousands of Americans and is one of the country's top exporters. Wall Street has also taken note of the announcement of new orders, and Boeing's share price has climbed steadily since early April, when Mr Trump announced steep new tariffs on many countries. Analysts note that the trade deal announcements could generate even more orders. That is because customers who have not placed orders may feel pressure to buy planes now or risk having to wait when they need them. Planes ordered today will typically be delivered years from now. Boeing, which declined to comment for this article, has seemed to welcome Mr Trump's interest in its business. Boeing chief executive Kelly Ortberg joined Mr Trump on a May visit to the Middle East, during which the Qatar deal was announced. 'If the president of the country says, 'Come with me and be certain that we sign something big that says there will be many jobs in the US', what will you do?' said Mr Adam Pilarski, president of Avitas, an aviation consulting firm. But Mr Pilarski and other experts cautioned that the orders might not be nearly as substantial as they seemed. The administration, other countries and Boeing have offered few details about the deals, suggesting that at least some are still subject to complex negotiations between the manufacturer and airlines. In July, for example, Mr Trump said Indonesia had agreed to buy 50 Boeing jets. Later, however, an Indonesian official said the deal was still being hashed out between Garuda, a state-owned airline, and Boeing. 'I suspect these orders are, as we used to joke at air shows, Mouthls – memoranda of understanding to have lunch,' said Mr Richard Aboulafia, a managing director at AeroDynamic Advisory, a consulting firm. 'The real hard work of contract negotiation and finance package negotiation takes place after the President's plane has left the country.' Even if the orders are confirmed with formal contracts, many probably would have been placed even without Mr Trump's intervention, experts said. In May, Qatar Airways, a large airline that operates many long-distance flights, placed an order for 150 of Boeing's wide-body planes. The announcement was notably thorough. 'They involved press conferences, shaking hands, everything but the proverbial kissing of the babies,' said Mr Courtney Miller, managing director of Visual Approach Analytics, an aviation consulting firm. That deal, he said, probably would have been placed anyway, even if the timing had been accelerated to align with Mr Trump's visit. While some orders may be the result of real political pressure, even then a lot can change by the time the planes are ready to be delivered. Boeing and Airbus each have thousands of planes on order, accounting for many years of production. In that time, airlines can back out of agreements, though they may have to forfeit deposits. Customers can also ask Boeing or Airbus to delay deliveries or reduce their orders. A manufacturer may be willing to make such changes, especially if doing so will allow it to sell those planes to another airline that is desperate for new jets. The tariffs Mr Trump has imposed may threaten the financial health of Boeing's suppliers, and the prospects of retaliation by US trading partners like the European Union could hurt the plane maker's sales. Last week, budget airline Ryanair said it would consider deferring deliveries of Boeing planes if European officials imposed tariffs on American planes. European leaders may take other steps that could hurt Boeing. If the trade deals that the US strikes with other countries give Boeing too big an advantage, Europe could try to entice other countries to order more planes from Airbus, experts said. 'If this game is going to be played, the question is, in the long term, who plays it better?' Mr Miller said. 'It has reopened a very old dynamic of aligning aircraft and airline economics with geopolitical favour.' NYTIMES
Business Times
40 minutes ago
- Business Times
Japan expects only 1% to 2% of $550 billion US fund to be investment
[TOKYO] Japan expects only 1 to 2 per cent of its recently agreed upon US$550 billion US fund to be in the form of actual investment, with the bulk of it being loans, according to the nation's top chief negotiator Ryosei Akazawa. At the same time, Tokyo would save roughly 10 trillion yen (S$87 billion) through lower tariff rates in its deal with America, he said. The US$550 billion investment framework will be a combination of investments, loans and loan guarantees provided by financial institutions backed by the Japanese government, Akazawa said on public broadcaster NHK on Saturday (Jul 26) night. Of the total, investment would be worth 1 per cent or 2 per cent and the US and Japan would split the profits of that investment at a ratio of 90-10, he said. Japan had originally proposed a 50-50 ratio, he added. The fund is a centrepiece of the deal announced by the two sides that will impose 15 per cent tariffs on Japanese cars and other goods. But the details given by Akazawa suggest the Japanese may end up giving up much less than at first glance. The comments come as officials from countries with deals with the US sift through the terms to explain to the public what they entail. 'It's not that US$550 billion in cash will be sent to the US,' Akazawa said. 'By letting the US have 90 per cent of the profits rather than 50 per cent, I think Japan's loss will be at most a couple of tens of billions of yen. People are saying various things, such as 'You sold out Japan', but they are wrong.' For the loans provided through the programme, Japan will simply be collecting the interest payments, and for the loan guarantees, if nothing happens, Japan will also be just collecting fees, Akazawa said. 'For that part, Japan's just making money,' he said. 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 Akazawa also clarified that the investment programme will not be only supporting Japanese and US firms. As a potential example, he cited a Taiwanese semiconductor firm building a factory in the US. 'We'd like to put the US$550 billion in place during President Trump's term,' Akazawa added. Further details of the implementation of the US-Japan deal remain unclear, including when the new tariff rates would take effect and when the new investment vehicle would kick off. There's been no joint document signed by both sides for the deal, although the White House has published a fact sheet. 'If you say something like, 'Let's create a joint document,' they will say, 'We will lower tariffs after the document is created,'' Akazawa said. In order not to lose time, 'we will demand that they issue an executive order to lower tariffs as soon as possible, regardless of a document'. Last week, Akazawa said that he expects universal tariffs on Japan's shipments to be lowered to 15 per cent on Aug 1, while he said he wanted the car tariffs to be cut to 15 per cent as soon as possible without specifying a date. The Trump administration has touted the deal with Japan as a potential model for others. On Sunday, the US and European Union agreed on a deal that will see the bloc face 15 per cent tariffs on most of its exports, with the EU pledging to invest US$600 billion in the US. BLOOMBERG
