Asia markets mixed, China rises after PBOC holds rates, Japanese yen strengthens after ruling party’s defeat

Asia-Pacific markets traded mixed on Monday after the People’s Bank of China kept its loan prime rates unchanged. Investors were also considering recent trade developments and tariff positions from the White House. Investors also monitored trade developments after Commerce Secretary Howard Lutnick reiterated that August 1 is a “hard deadline” for tariff payments, while leaving the door open for continued negotiations. Gold prices hovered around $3,350 per ounce on Monday, with investors closely watching developments on trade negotiations. Japan ( NKY:IND ) market closed. The Japanese yen strengthened to around 148.5 per dollar on Monday, recovering some of last week’s decline after the ruling coalition lost its majority in the upper house election. Japanese Prime Minister Shigeru Ishiba’s ruling coalition failed to secure a majority in the 248-seat upper house in Monday’s election, NHK public television reports. The Liberal Democratic Party and junior partner Komeito needed 50 seats but won just 47, with one undecided. China ( SHCOMP ) rose 0.50% to around 3,550 while the Shenzhen Component added 0.5% to 10,965 on Monday, with mainland stocks reaching multi-month highs after the People’s Bank of China kept key lending rates at record lows for July, and the offshore yuan was little changed to around 7.17 per dollar. The People’s Bank of China kept key lending rates at record lows during the July fixing , in line with expectations. The one-year loan prime rate, which guides most corporate and household lending, was held at 3.0%, while the five-year LPR, a benchmark for mortgage rates, remained at 3.5%. Meanwhile, China’s bond ETFs have topped $50 billion in assets, signaling strong investor demand as deflationary pressures mount, keeping yields subdued. Separately, China’s industry ministry pledged to stabilize growth in key sectors such as machinery, autos, and electrical equipment. The initiative aims to modernize production and could boost demand for industrial metals. China’s exports of rare earth magnets to the US surged 660% in June 2025 from May, reaching 353 metric tons, according to data released Sunday by the General Administration of Customs. Looking ahead, the upcoming Asia-Pacific Economic Cooperation summit in South Korea this October may offer fresh cues on China’s policy outlook. Hong Kong ( HSI ) rose 0.22% to 24,920 in Monday morning deals, extending gains from the previous session. Locally, business sentiment in Hong Kong improved for a second consecutive quarter in Q3 2025. India ( SENSEX ) rose 0.42% Australia ( AS51 ) fell 1.22% to 8,693 on Monday, retreating from an all-time high in the previous session. The Australian dollar depreciated past $0.65 on Monday, extending losses from the previous week, as market sentiment remained subdued ahead of this week’s release of the RBA meeting minutes and a speech by Governor Michele Bullock. Meanwhile, concerns about Australia’s economic resilience persisted after Treasurer Jim Chalmers addressed the risk of potential US tariffs of up to 200% on pharmaceutical exports—a key industry. In the U.S., on Friday, all three major indexes ended near the flatline as investors weighed President Trump’s push for higher tariffs on the European Union against strong economic data and corporate earnings. U.S. stock futures rise on Monday as investors prepared for big tech earnings reports, led by Alphabet and Tesla: Dow +0.05% ; S&P 500 +0.11% ; Nasdaq +0.19% . Later today, Verizon, Domino’s Pizza and Cleveland-Cliffs are among the companies scheduled to release their quarterly results. Currencies: ( JPY:USD ), ( CNY:USD ), ( AUD:USD ), ( INR:USD ), ( HKD:USD ), ( NZD:USD ). More on Asia: PBOC keeps benchmark lending rates unchanged for 2nd month in July Japan’s core inflation eases to 3.3% in June, slowest pace since March 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

Source: Seeking Alpha