Asia stocks subdued amid Trump’s Fed comments and broad tariff letter; U.S. futures drop slightly

Asian stocks moved in a flat-to-low range on Thursday, following an upbeat session on Wall Street overnight after US President Trump signaled no intention to remove Fed Chair Powell, easing concerns over central bank independence. On the trade front, Trump said he would send a single letter to over 150 countries, outlining the tariff rates they would face and describing most as “not big countries” with limited U.S. trade ties. Bitcoin ( BTC-USD ) hovered around $118,000 on Thursday, moving sideways after retreating from record highs earlier in the week, as investors weighed developments on key cryptocurrency regulation bills. Gold prices fell to around $3,340 per ounce on Thursday, giving back gains from the previous session. Japan ( NKY:IND ) rose 0.22% to 39,439, while the broader Topix Index fell 0.1% to 2,816 during Thursday morning trading, as traders remained cautious after US President Trump reiterated his intention to impose a 25% tariff on Japan. The Japanese yen fell to around 148 per dollar on Thursday, as investors reacted to disappointing trade figures that fueled concerns about a potential technical recession. Japan’s trade surplus significantly narrowed to JPY 153.1 billion in June 2025, a substantial drop from JPY 221.3 billion a year prior and well under the forecasted JPY 353.9 billion. Exports fell for the second consecutive month, declining 0.5% year-on-year to JPY 9,162.6 billion. Conversely, imports edged up 0.2% to JPY 9,009.5 billion, defying predictions for a 1.6% drop and marking their first increase in three months. Investors are now turning their attention to the upcoming Upper House election on July 20, amid growing speculation that the government may unveil new fiscal stimulus measures. China ( SHCOMP ) rose 0.08% to around 3,500 while the Shenzhen Component climbed 0.6% to 10,780 on Thursday, with mainland stocks showing mixed performance as investors continued to monitor ongoing global trade developments. China’s cabinet on Wednesday pledged to contain “irrational” competition in the electric vehicle sector, vowing stronger cost investigations and price monitoring, according to state broadcaster CCTV. Trump has softened his stance on China to secure a summit with Xi Jinping and a trade deal, shifting focus from tough rhetoric to quick purchase agreements amid ongoing trade concerns. Investors now await the People’s Bank of China’s latest loan prime rate decision later this week, with expectations for no change. Hong Kong ( HSI ) rose 0.14% were little changed in Thursday morning trade, after ending slightly lower in the prior session. India ( SENSEX ) fell 0.26% to 82,441 in early deals on Thursday, reversing from an almost flat performance in the previous session. Australia ( AS51 ) rose 0.77% to above 8,595 on Thursday, reversing losses from the previous session, supported by a positive lead from Wall Street overnight. The Australian dollar weakened to below $0.650 on Thursday, pulling back gains from the previous session, as weaker-than-expected labor data reinforced expectations of an RBA rate cut in August. The Australian Bureau of Statistics reported that the unemployment rate rose to an over three-year high of 4.3% in June, ending its five-month hold and exceeding forecasts of 4.1%, while employment increased by just 2K, well below the expected 20K gain. Consumer inflation expectations in Australia eased to 4.7% in July 2025 from June’s two-year peak of 5.0%, suggesting a more balanced outlook for inflation risks amid continued labor market strength. In the U.S., on Wednesday, all three major indexes ended in green after President Trump stated he wasn’t planning to dismiss Fed Chair Jerome Powell, easing concerns stirred by earlier reports that he was considering taking action. U.S. stock futures declined notably on Thursday despite overnight Wall Street gains, as sentiment wavered after President Trump’s assurance that he has no plans to remove Fed Chair Powell: Dow -0.16% ; S&P 500 -0.13% ; Nasdaq -0.10% . Currencies: ( JPY:USD ), ( CNY:USD ), ( AUD:USD ), ( INR:USD ), ( HKD:USD ), ( NZD:USD ). More on Asia: Australia’s unemployment rate rise to over three-year high of 4.3% in June Japan’s June trade surplus plummets, exports contract again amid U.S. tariffs China’s GDP growth slows to 5.2% in Q2, slightly beats forecasts China’s June industrial output rises by 6.8%, but retail sales & investment disappoints China’s trade jumps: Exports beat, imports miss on domestic weakness

Source: Seeking Alpha