Asia stocks steady amid Middle East tensions, eyes on central bank meetings; U.S. futures steady

Asia stock markets were little changed on Monday, following Friday’s sharp sell-off on Wall Street amid escalating Middle East tensions and global economic concerns. Investors digested a batch of mixed Chinese economic data. Geopolitical risks also lingered, with Israel and Iran exchanging fresh attacks over the weekend, with both sides targeting energy infrastructure and pushing oil prices higher. Iran also threatened to close the Strait of Hormuz, a vital artery for global oil shipments, adding to market uncertainty. With key central bank meetings dominating the agenda this week, all eyes are on the Bank of Japan’s Tuesday announcement, followed by rate decisions from the Federal Reserve, Bank of England, Swiss National Bank, and the People’s Bank of China. Markets will also be closely watching any progress on trade negotiations between the US and its key partners. Gold rose to around $3,440 per ounce on Monday, hovering near all-time highs reached in April. Japan ( NKY:IND ) rose 1.24% to above 38,000 while the broader Topix Index gained 0.8% to 2,778 on Monday, reversing losses from the previous session. The Japanese yen slipped past 144.2 per dollar on Monday, extending losses for a second consecutive session. Domestically, investors are focused on the Bank of Japan’s upcoming policy decision. China ( SHCOMP ) rose 0.14% to around 3,380 while the Shenzhen Component rose 0.4% to 10,160 on Monday, with mainland stocks recouping some losses from the previous session as investors assessed a batch of mixed domestic economic data while monitoring heightened geopolitical tensions, and the offshore yuan held steady to around 7.18 per dollar on Monday. China’s May’s activity data was mixed : retail sales posted strong growth, increased by 6.4% yoy in May 2025 and the jobless rate eased, but industrial output slowed, rose by 5.8% yoy in May 2025. China’s surveyed unemployment rate inched down to 5% in May 2025, slightly below both market forecasts and April’s figure of 5.1%. China’s fixed-asset investment increased by 3.7% year-on-year in the January–May 2025 period, falling short of market expectations for a 3.9% rise. China’s new home prices in 70 cities dropped 3.5% year-on-year in May 2025, easing from a 4.0% decline in the previous month. The People’s Bank of China injected 400 billion yuan into the banking system via six-month reverse repos, following a record 1 trillion yuan operation the previous week. Hong Kong ( HSI ) rose 0.06% to 23,869 by midday Monday, down for the third session as traders assessed mixed data from China. India ( SENSEX ) rose 0.49% rose 169 points or 0.2% to 81,284 on Monday morning, snapping a two-session losing streak. Australia ( AS51 ) flat to around 8,530 in early trading on Monday. The Australian dollar extended its recent decline to around $0.648 on Monday, as heightened geopolitical tensions in the Middle East continued to weigh on market sentiment. In the U.S., on Friday, all three major indexes ended lower as risk appetite faded after Iran denounced Israel’s airstrikes as a “declaration of war” and responded with missile attacks late Friday local time. Markets are signaling a clear message: the central bank will likely keep rates unchanged on Wednesday, with no reduction foreseen in July. All eyes are now on upcoming economic indicators—manufacturing data, retail sales, and weekly jobless claims—for further insight into the Fed’s path forward. U.S. stock futures were little changed on Monday as investors weighed rising geopolitical risks following the intensifying conflict between Israel and Iran: Dow +0.06% ; S&P 500 +0.17% ; Nasdaq +0.24% . Currencies: ( JPY:USD ), ( CNY:USD ), ( AUD:USD ), ( INR:USD ), ( HKD:USD ), ( NZD:USD ). More on Asia: China’s retail sales fastest in year, industrial output weakest in six months; jobless rate dips Japan’s factory output sees larger-than-expected decline, down 1.1% sequentially Japan’s producer prices rise 3.2% Y/Y in May, the least in 8 months China’s May CPI declines fourth consecutive month, PPI deflation eases to two-year low China’s trade surplus widens amid weaker exports and deeper import slump

Source: Seeking Alpha