Asia markets mixed on disappointing economic data, US-China trade tensions; U.S. futures flat after soft session

Asia stock markets trade mixed on Thursday as US stocks struggled for momentum overnight, investors shifted toward safer assets amid disappointing China’s PMI data and rising US-China trade tensions. Moreover, tensions intensified over Beijing’s reluctance to relax its restrictions on rare earth exports and its accusation that Washington is obstructing access to advanced technologies. President Donald Trump on Wednesday lashed out at Federal Reserve Chair Jerome Powell, demanding rate cuts just after ADP reported the weakest private sector job growth since March 2023. On Truth Social, Trump wrote, “Europe has lowered nine times!”. On the geopolitical front, trade developments also drew attention as Trump called it “extremely hard” to deal with Xi, despite earlier suggestions that the two leaders could speak this week, while China eyes a major Airbus deal in a shift toward closer EU ties. Gold held its recent gains near $3,370 per ounce on Thursday, remaining close to a nearly four-week high as investors grappled with growing economic uncertainty. Japan ( NKY:IND ) fell 0.47% to around 37,700 while the broader Topix Index dropped 0.6% to 2,770 on Thursday, pressured by concerns over the country’s economic outlook after data showed real wages declined for the fourth straight month in April. The Japanese yen held firm around 142.9 on Thursday, after gaining nearly 1% in the previous session. Japan’s economic outlook faces deeper concerns as April marked the fourth consecutive decline in real wages, nominal wages in Japan rose 2.3% year-on-year in April 2025, matching the pace seen in March but falling short of market expectations of a 2.6% increase. The Bank of Japan is thinking about slowing bond purchase tapering next fiscal year to avoid market issues, with a decision expected at the June policy meeting, Reuters reported, citing four sources. China ( SHCOMP ) rose 0.08% were little changed on Thursday, struggling for clear direction amid heightened uncertainty on Sino-US trade relations, and the offshore yuan weakened toward 7.18 per dollar on Thursday, snapping a two-session wining streak, as investors weighed disappointing PMI data and the ongoing US-China trade tensions. A private survey of data indicating a rebound in China’s services activity in May, following a seven-month low in April . China’s composite PMI fell to a 2-1/2-year low in May 2025, marking the first contraction in private sector activity since December 2022. China has launched a national tracking system for its rare earth magnet sector, sources told Reuters, adding a new layer of oversight as recent export restrictions begin to impact global supply chains. Meanwhile, the OECD maintained its forecast for China’s GDP growth at 4.7%. Meanwhile, uncertainties surrounding US-China trade relations grew after President Donald Trump emphasized the need for direct talks with Chinese President Xi Jinping to prevent further deterioration in trade and technology ties. Hong Kong ( HSI ) rose 0.52% to 23,869 in Thursday morning deals, increasing for the third session. India ( SENSEX ) rose 0.45% Australia ( AS51 ) fell 0.06% rose 0.3% to above 8,560 on Thursday, extending its rally to a third consecutive session. The Australian dollar held its recent gains around $0.649 on Thursday. Meanwhile, Australia’s trade surplus narrowed to AUD 5.41 billion in April , below expectations and down from a revised AUD 6.89 billion in March. The decline was driven by a 2.4% fall in exports and a 1.1% rise in imports. In the U.S., on Wednesday, all three major indexes ended mostly muted as investors digested a steep slowdown in private-sector hiring, with the ADP report showing just 37K new jobs in May, well below expectations. Investors cautiously awaited the latest weekly jobless claims due Thursday and the closely watched nonfarm payrolls report set for release Friday. U.S. stock futures dipped on Thursday after the OECD recently lowered its 2025 U.S. growth forecast to 1.6% from 2.2%, citing tariff risks and policy uncertainty: Dow -0.04% ; S&P 500 -0.04% ; Nasdaq -0.03% . Currencies: ( JPY:USD ), ( CNY:USD ), ( AUD:USD ), ( INR:USD ), ( HKD:USD ), ( NZD:USD ). More on Asia: Australia’s trade surplus narrows in April to AUD 5.41B on weaker exports, higher imports China’s services sector growth accelerates in May amid stronger business & activity Australia’s Q1 GDP misses estimates amid weak public spending, consumer demand, and exports Australia’s manufacturing stalls at -23.5 in May, services sector continues 16-month growth Japan services PMI revised upward to 51.0 in May 2025

Source: Seeking Alpha