Japanese Shares Rise Despite Tariff Worries
The Nikkei 225 rose 0.33% to close at 39,821 on Wednesday, while the broader Topix Index advanced 0.41% to 2,828, extending gains from the previous session despite growing trade tensions. Investors assessed the latest tariff developments from Washington, where US President Donald Trump confirmed that there would be no revisions or delays to the updated duties targeting 14 countries. Japan is set to face a 25% tariff beginning August 1. Japanese Prime Minister Shigeru Ishiba called the move “truly regrettable” but emphasized that Tokyo will continue talks with the US in pursuit of a mutually beneficial agreement. In addition to the Japan-specific levies, Trump also unveiled a 50% tariff on copper imports and floated the prospect of tariffs as high as 200% on pharmaceutical products, heightening concerns over global trade disruptions. Among notable gainers, Sanrio climbed 2.5%, Toyota Motor added 0.9%, and SoftBank Group rose 0.8%.
Indonesia Car Sales Slump 22.6% YoY in June
Car sales in Indonesia slumped by 22.6% year-on-year to 57,752 units in June 2025, following a 15.1% drop in the previous month, according to the Association of Indonesian Automotive Industries (GAIKINDO). This marked the second straight month of declining sales, underscoring growing concerns within Indonesia's automotive sector as it reflects deteriorating economic sentiment and mounting market challenges. Nevertheless, GAIKINDO remains upbeat about the industry's prospects, setting a 2025 car sales target of between 750,000 and 900,000 units. This projection surpasses both the revised estimate of 850,000 units for 2024 and the 865,723 vehicles sold last year. On a monthly basis, car sales fell by 4.7% in June 2025, reversing an 18.4% surge in the previous month.
Iron Ore Extends Gains on Bullish Fundamentals
Iron ore futures climbed to around CNY 735.5 per tonne on Wednesday, building on the previous session’s gains amid tightening supply and resilient demand indicators. Shipments from major exporters Australia and Brazil to China continued to decline, reinforcing concerns about constrained global supply. On the demand side, hot metal output—a key proxy for iron ore consumption—remained elevated, while steel demand from China’s manufacturing sector showed continued strength. However, the broader economic outlook remains uncertain. Mixed data from China showed consumer prices rose 0.1% year-on-year in June, marking the first positive reading in five months. At the same time, producer prices fell 3.6%, the steepest drop since July 2023, reflecting intensified price competition and weak domestic demand.
Silver Slips on Stronger Dollar, Yields
Silver prices slipped to around $36.50 per ounce on Wednesday, marking their third consecutive decline, as a stronger US dollar and rising Treasury yields weighed on precious metals. The moves came amid renewed concerns over US trade policy following a series of aggressive tariff announcements from President Donald Trump. He ruled out any extension to the newly imposed tariffs targeting 14 countries, set to take effect on August 1. He also unveiled a 50% tariff on copper imports and threatened to impose levies of up to 200% on pharmaceutical imports, though implementation would be delayed by 12 to 18 months to allow for industry adjustments. Meanwhile, investors are awaiting the release of the latest Federal Open Market Committee minutes for clues on the Federal Reserve’s policy outlook. A stronger-than-expected US jobs report for June has dampened hopes for imminent rate cuts, further supporting the dollar and yields—both typically bearish for silver.
Danish Current Account Surplus Hits 1-Year Low
Denmark’s seasonally adjusted current account surplus narrowed to DKK 28.3 billion in May 2025, from a downwardly revised DKK 29.9 billion in the previous month. This marked the lowest surplus amount since May 2024, as the goods account surplus decreased to DKK 22.7 billion from DKK 26.1 billion, due to a 1.2% decline in exports. At the same time, the services account surplus eased to DKK 0.6 billion from DKK 1.1 billion. On the income side, the secondary income deficit widened slightly to DKK 3.1 billion from DKK 2.9 billion, while the primary income surplus rose to DKK 8.0 billion from DKK 5.6 billion, partially offsetting the overall decline.
Thailand Consumer Confidence Lowest Since 2023
The University of the Thai Chamber of Commerce’s consumer confidence index dropped to 52.7 in June 2025, from 54.2 in the previous month. This marked the fifth consecutive monthly decline and the lowest level since February 2023, weighed down by escalating concerns over steep US tariffs and ongoing political instability. Thailand’s economy is expected to lose momentum in the second half of the year, with forecasts indicating a 4% year-on-year contraction during that period due to the impact of potential US trade measures. If no agreement is reached before August 1, Thailand could face US tariffs as high as 36%, further deepening its economic challenges. The US was Thailand’s top export market in 2024, accounting for 18.3% of total exports valued at $55 billion. However, Washington reported a $45.6 billion trade deficit with Thailand that year. Deputy Central Bank Governor Piti Disyatat projected GDP growth at 2.3% for 2025, with a further slowdown to 1.7% expected in 2026.
Japan 10-Year Yield Rises on Trade Tensions
Japan’s 10-year government bond yield climbed to around 1.5% on Wednesday, marking a five-week high as US-Japan trade talks showed signs of strain, particularly over Tokyo’s protection of its rice market. The move comes after US President Donald Trump announced a 25% tariff on Japanese goods, effective August 1, and confirmed there would be no revisions or delays to the broader set of duties imposed on 14 countries. Japanese Prime Minister Shigeru Ishiba called the tariff decision “truly regrettable” but reiterated Japan’s commitment to continue negotiations with Washington in pursuit of a mutually beneficial agreement. Adding to market unease, Bank of Japan board member Junko Koeda warned of potential second-round inflation effects stemming from recent food price increases, including rice. Meanwhile, growing speculation that Japanese lawmakers may unveil additional fiscal stimulus ahead of the July 20 upper house elections added further pressure to long-term bond markets.
Lithuania Producer Prices Fall for 6th Month
Producer prices in Lithuania dropped by 2.7% year-on-year in June 2025 from a downwardly revised 2.8% fall in the previous month. This marked the sixth consecutive month of falling producer prices, albeit at a softer pace. Deflation eased for manufacturing (-2.7% vs -3.5% in May), while electricity, gas, steam & air-conditioning supply declined (-4.3% vs 2.3%). Additionally, prices edged down for water supply; sewerage, waste management and remediation activities (2.8% vs 2.9%). Meanwhile, costs increased for mining and quarrying (4.7% vs 0.4%). On a monthly basis, producer prices rose by 0.5%, rebounding from a 0.5% decrease in the preceding period.
Danish Trade Surplus Smallest in 1 Year
Denmark’s seasonally adjusted goods and services trade surplus narrowed to DKK 23.4 billion in May 2025 from a downwardly revised DKK 27.2 billion in the previous month. This marked the lowest surplus since May 2024, as exports fell by 0.8% month-on-month to DKK 172.9 billion, weighed down by the decline in goods exports (-1.2%) and services exports (-0.1%). On the other hand, imports rose by 1.7% to DKK 149.6 billion, supported by the increase in goods imports (2.7%) and services imports (0.6%). For the first five months of the year, the country posted a DKK 121.5 billion surplus, widening from DKK 103.1 billion in the same period of 2024.
Japan Machine Tool Orders Fall for First Time in 9 Months
Japan’s machine tool orders fell by 0.5% year-on-year to JPY 133,150 in June 2025, slipping from a 3.4% increase in the previous month. This marked the first month of contraction in machine tool orders since September last year, mainly due to a decline of 3.3% from a year earlier in domestic demand to JPY 39,869. Meanwhile, foreign orders rose marginally by 0.3% to JPY 93,281. On a monthly basis, orders advanced by 3.4% in June, rebounding from a 1.2% decrease in the preceding period.
Euro Steadies Near 4-Year High as EU, US Race to Finalize Trade Deal
The euro held steady around $1.17, near its highest level since August 2021, as investors awaited updates on US-EU trade negotiations. The European Union aims to finalize a preliminary agreement with Washington this week to secure a 10% tariff framework beyond the August 1 deadline, while talks toward a permanent deal continue. On Tuesday, reports surfaced that the US proposed maintaining a 10% baseline tariff, with exemptions for key sectors such as aircraft and spirits. However, Washington has shown no willingness to extend exemptions to politically sensitive industries, including cars, steel, aluminum, and pharmaceuticals, despite requests from Brussels. In response, the EU is preparing retaliatory tariffs on various US goods and has warned that additional measures—such as export controls and restrictions on US companies' access to public contracts—could follow if no deal is reached. Meanwhile, in monetary policy, markets are pricing in just one more rate cut from the ECB this year.
European Markets Poised for Modest Gains
European equity markets were set to open slightly higher on Wednesday as investors weighed the latest tariff announcements from Washington. US President Donald Trump ruled out any extensions to the newly imposed duties targeting 14 countries, scheduled to take effect on August 1. He also announced a 50% tariff on copper imports and floated the possibility of levies as high as 200% on pharmaceutical imports, though those measures would be delayed by 12 to 18 months to allow for industry adjustments. Market participants are also closely watching for progress on a potential US-EU trade agreement, with speculation mounting that a deal could be announced soon. In premarket trading, futures for the Euro Stoxx 50 and Stoxx 600 edged up 0.2% and 0.1%, respectively.
Norway Producer Prices Drop for 2nd Month
Producer prices in Norway decreased by 1% year-on-year in June 2025, slipping further from a 0.1% fall in the previous month. This marked the second consecutive month of deflation, amid lower prices for energy goods (-5.4% vs -3.9% in May) and extraction of oil and natural gas (-6.6% vs -7.5%). In addition, price growth slowed sharply for electricity, gas, and steam (12.9% vs 40.2%). Meanwhile, costs increased for manufacturing (1.8% vs 1.6%). Excluding energy goods, producer prices rose by 2.8% in June, the same pace as in the prior month. On a monthly basis, the PPI fell by 0.3%, easing from a 3% decline in May.
Palm Oil Rises for 3rd Session
Malaysian palm oil prices hovered above MYR 4,660 per tonne, marking the third session of gains and holding at their highest in nearly three months. The bullish momentum was driven by strength in the Dalian exchange and a weaker ringgit. Also, production is expected to ease as palm trees enter their seasonal rest phase ahead of peak output in Q3. Meanwhile, exports strengthened, with June shipments up 4.3% to 4.7% from May, according to cargo surveyor data. At the same time, an Indonesian group warned that shipments to the U.S. may fall due to 32% tariffs on Indonesian goods, potentially giving Malaysia a trade edge. Demand from India—the top palm oil importer—remained strong, with June imports hitting an 11-month high amid competitive pricing. However, further gains were capped by weak data from China, where consumer prices edged up in June but producer prices shrank the most in near two years. Globally, U.S. President Trump reignited trade tensions with fresh tariff threats.
NZX 50 Slides After RBNZ Hits Pause on Rate Cuts
The S&P/NZX 50 index dropped 0.7% to close at 12,769 on Wednesday, retreating from an over seven-week high hit in the prior session, after the Reserve Bank of New Zealand paused its rate-cutting cycle. The RBNZ held its cash rate steady at 3.25% as widely expected, amid concerns that current inflation and global trade tensions could sustain price pressures. The pause follows six consecutive cuts since last August, totaling 225 basis points. However, policymakers indicated further cuts remain likely if inflation eases in line with the May forecasts. In corporate news, Citi downgraded a2 Milk to "neutral" from "buy," citing several datapoints that made the brokerage "incrementally" more cautious on the dairy producer’s near-term outlook. Shares of a2 Milk fell 4.1% to their lowest level since early April. Other notable decliners included Meridian Energy (-2.3%), Infratil (-1.5%), Port of Tauranga (-1.3%), and Fletcher Building (-3.5%). Property stocks also weighed on the market.
FX Updates: Australian Dollar Rises by 0.28%
Top currency gainers are Australian Dollar (0.28%), Dollar Index (0.05%) and British Pound (0.01%). Biggest losers are Japanese Yen (-0.12%) and Euro (-0.09%).
US 10-Year Yield Holds Advance And Tariff Developments
The yield on the US 10-year Treasury note held above 4.4% on Wednesday after rising for five straight sessions, as investors evaluated the latest tariff measures unveiled by President Donald Trump. The president confirmed that the newly imposed duties targeting 14 countries would proceed as scheduled on August 1, with no revisions or delays. He also announced a 50% tariff on copper imports and indicated that more sector-specific tariffs could follow. In a more aggressive move, the president threatened to impose tariffs of up to 200% on pharmaceutical imports, though he noted that these would be delayed by 12 to 18 months to give the industry time to adjust. Market participants are now turning their attention to the upcoming release of the Federal Open Market Committee minutes for clues on the Federal Reserve’s next steps in monetary policy.
China 10-Year Yield Drops After Inflation Data
China’s 10-year government bond yield dropped to around 1.64% on Wednesday, following the release of mixed inflation figures. Annual consumer prices in June 2025 rose by 0.1%, breaking a three-month streak of 0.1% declines and surpassing market expectations of no growth. Despite this slight rebound in consumer inflation, the increase was modest, weighed down by ongoing challenges in the property market and renewed tariffs by US President Donald Trump. On the other hand, producer prices continued to slide, with a 3.6% year-on-year drop—worse than the forecasted 3.2% decline and deeper than May’s 3.3% decrease. This marked the 33rd consecutive month of producer deflation and the steepest contraction since July 2023. The sustained fall in producer prices underscores mounting economic strains as China grapples with sluggish domestic demand and growing uncertainty amid escalating global trade tensions.
Offshore Yuan Falls Amid Inflation Data
The offshore yuan fell to around 7.18 per dollar on Wednesday, as investors reacted to the latest inflation data from China. Annual consumer prices rose 0.1% in June 2025, ending a three-month streak of 0.1% declines and beating market expectations of flat growth. Although consumer inflation modestly rebounded, the increase was minimal amid property sector stress and renewed tariffs from US President Donald Trump. Meanwhile, annual producer prices dropped 3.6%—worse than the anticipated 3.2% decline and steeper than May’s 3.3% fall. This marked the 33rd consecutive month of producer deflation and the sharpest drop since July 2023. The persistent decline in producer prices highlights mounting economic pressures as China struggles with weak domestic demand and uncertainty stemming from escalating global trade tensions. Externally, the yuan also came under pressure from a strengthening greenback amid intensified trade concerns following recent moves by the Trump administration.
Hong Kong Stocks Slip Amid Tariff Risks
Hong Kong shares fell 197 points, or 0.8%, to 23,953 around midday Wednesday, reversing gains from the previous session amid a modest drop in U.S. futures after U.S. President Trump escalated his global trade war by threatening a 50% tariff on copper and signaling upcoming levies on semiconductors and pharmaceuticals. In China, consumer prices rose slightly in June after four months of decline, indicating that deflationary pressures remained elevated. Meanwhile, producer prices saw their steepest drop in nearly two years amid intense competition among Chinese businesses, persistently weak domestic demand, and mounting tariff risks. Still, losses were limited by optimism that new company listings in Hong Kong will pick up in the second half of the year. Losses were almost broad-based, led by declines in property, tech, and consumer sectors. Notable laggards included Henderson Land Development (-8.8%), Sun Hung Kai Properties (-3.1%), Tencent Holdings (-1.6%), and SMIC (-1.5%).
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