Asia markets trade mixed amid Israel-Iran tensions, Lujiazui forum in Shanghai, Fed decision in focus

Asia stock markets mixed on Wednesday, following Wall Street’s decline on Tuesday amid worries that the U.S. could become directly involved in the Israel-Iran conflict. Hostilities between Israel and Iran have persisted, entering its sixth day of attacks on each other’s territories, despite a call from U.S. President Donald Trump for Tehran’s unconditional surrender and threatening a potential strike against Supreme Leader Khamenei in a series of posts on Truth Social. Meanwhile, in the U.S., investors are gearing up for the Federal Reserve’s policy decision later in the day. Gold edged lower to around $3,380 per ounce on Wednesday, amid escalating geopolitical tensions. Japan ( NKY:IND ) rose 0.75% to above 38,600, while the broader Topix Index also added 0.2% to 2,792 on Wednesday. The Japanese yen held around 145.2 per dollar on Wednesday after falling for three straight sessions, as a series of disappointing economic indicators weighed on sentiment. Japan’s trade deficit decreased significantly to JPY 637.61 billion in May 2025 from JPY 1,225.17 billion in the same month last year, beating market expectations of a JPY 893 billion gap, as exports fell in May for the first time in eight months amid US tariff pressure, while imports dropped more than expected. Separate data showed, Japan’s core machinery orders—excluding volatile items such as ships and electric power—fell 9.1% month-over-month to ¥919 billion in April 2025, marking a sharp reversal from March’s 13% surge. The Reuters Tankan index for Japanese manufacturers dropped to +6 in June 2025, marking a second consecutive monthly decline after readings of +9 in April and +8 in May. China ( SHCOMP ) fell 0.11% to around 3,384, while the Shenzhen Component slipped 0.2% to 10,130 on Wednesday, extending losses from the previous session as investors turned cautious ahead of the Lujiazui Forum in Shanghai today, and the offshore yuan steadied around 7.18 per dollar on Wednesday, as investors turned their attention to the Lujiazui Forum in Shanghai. Three major Chinese financial regulators—the People’s Bank of China, the National Financial Regulatory Administration, and the China Securities Regulatory Commission—are jointly organizing the event with the Shanghai Municipal Government. Investors are keenly awaiting significant financial policy announcements. On the monetary policy front, investors are focused on the PBoC’s upcoming policy decision. Hong Kong ( HSI ) fell 1.09% to 23,713 in early Wednesday trading, extending losses for the second day amid broad-based sector declines. At the Lujiazui Forum, Hong Kong and Shanghai are poised to ink a deal deepening financial cooperation, aiming to strengthen ties and resilience amid rising geopolitical tensions. Hong Kong’s seasonally adjusted unemployment rate hit a two-year high of 3.5% in the three months ending May, due to some headwinds including shifts in consumption patterns. India ( SENSEX ) rose 0.05% to 81,741 in Wednesday morning trade, recovering losses from the previous session. Australia ( AS51 ) fell 0.14% to around 8,520 on Wednesday, marking its second straight session of losses. The Australian dollar strengthened to around $0.649 on Wednesday, recouping some losses from the previous session. The Westpac-Melbourne Institute Leading Economic Index for Australia edged down 0.1% in May 2025, after a flat reading in the previous month. Domestically, attention turns to Thursday’s labor market data, which could provide fresh momentum to the economy and influence the RBA’s policy outlook. In the U.S., on Tuesday, all three major indexes ended lower as investors closely monitored escalating tensions in the Middle East, with the Israel-Iran conflict entering its fifth day. Traders are also monitoring upcoming US housing data and weekly jobless claims, both due ahead of Thursday’s market holiday. U.S. stock futures were little changed on Wednesday as investors braced for the Federal Reserve’s latest monetary policy decision: Dow +0.03% ; S&P 500 +0.12% ; Nasdaq +0.18% . Currencies: ( JPY:USD ), ( CNY:USD ), ( AUD:USD ), ( INR:USD ), ( HKD:USD ), ( NZD:USD ). More on Asia: Japan’s exports dip, imports slump amid tariff pressures; machinery orders weaken Asian markets mostly lower as Trump urges evacuation of Tehran, Japan U.S. fail to reach deal BoJ stands pat on interest rate; Tokyo and Washington fail to reach trade deal 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

Source: Seeking Alpha