Asia report: Markets mixed on tariff threats, economic data
By Josh White
Date: Wednesday 06 Aug 2025
(Sharecast News) - Asia-Pacific markets ended mixed on Wednesday as investors weighed fresh tariff threats from US president Donald Trump.
Speaking overnight on Tuesday, Trump said he planned to announce new tariffs targeting semiconductors and chips "within the next week or so", apparently aiming to boost domestic production of critical technology components.
"Asian stock markets saw gains, driven by a rise in Japanese carmakers fuelled by hopes of achieving lower auto tariffs in talks with the US," said TickMill market strategy partner Patrick Munnelly.
"Indian stock prices remained stable after the central bank opted to keep the benchmark interest rate unchanged, as officials evaluate the repercussions of US president Donald Trump's tariff strategies on the nation.
"Asian chip-related shares, along with some pharmaceutical stocks, fell following Trump's announcement of impending levies on those sectors 'within the next week or so'."
Munnelly noted that Japan's chief trade negotiator, Ryosei Akazawa, was not travelling to Washington to persuade the US to honour its commitment to reduce car tariffs, as agreed in last month's trade negotiations.
"Tariff discussions once again took centre stage, with Trump indicating he is 'very close to a deal' with China, while India braces for the impact of his threats.
"US stocks are stabilising following a recent surge amid worries regarding future interest rate movements and poor economic reports.
"Recent soft job figures have complicated the Federal Reserve's efforts to balance controlling inflation with fostering economic growth."
Most markets rise after Trump's latest tariff threats
In Japan, stocks advanced with the Nikkei 225 rising 0.65% to 40,812.50 and the broader Topix index gaining 1.02% to 2,966.57.
Gains were led by Japan Steel Works, up 6.1%, followed by Mitsui Fudosan and Kajima, which rose 5.85% and 5.39% respectively.
Chinese markets also posted modest gains - the Shanghai Composite added 0.45% to 3,633.99, while the Shenzhen Component climbed 0.64% to 11,177.78.
Among the top performers were Daheng New Epoch Technology, China Shipbuilding Industry, and Zhejiang Aokang Shoes, each surging over 10%.
Hong Kong's Hang Seng Index was largely flat, edging up 0.03% to 24,910.63.
BYD Electronic International rose 6.72%, SMIC gained 3.14%, and China Shenhua Energy advanced 2.99%.
In South Korea, the Kospi 100 declined 0.26% to 3,217.46, with notable losses from SK Biopharmaceuticals, down 8.89%, EcoPro Materials off 4.22%, and Hanwha Techwin falling 2.6%.
Australia's S&P/ASX 200 rose 0.84% to 8,843.70, buoyed by strong performances from Platinum Asset Management, which jumped 14.49%, IDP Education, up 11.7%, and St Barbara, which gained 8.93%.
Across the Tasman Sea, New Zealand's S&P/NZX 50 was little changed, adding 0.02% to 12,880.16.
Eroad led gains with a 4.61% rise, followed by Chorus up 3.3% and Property for Industry up 1.31%.
In currency markets, the dollar was steady against the yen, rising 0.05% to trade at JPY 147.69, while it slipped 0.36% on the Aussie to AUD 1.5395, and retreated 0.41% against the Kiwi, changing hands at NZD 1.6872.
Oil prices climbed, with Brent crude futures last up 1.49% on ICE at $68.65 per barrel, and the NYMEX quote for West Texas Intermediate rising 1.5% to $66.17.
NZ unemployment spikes to four-year high, Australian industry recovering
On the economic front, New Zealand's labour market softened further in the second quarter, with employment falling 0.1% quarter-on-quarter and the unemployment rate rising to 5.2%, its highest level since 2020.
While that was slightly below market expectations of 5.3%, the participation rate also dropped 0.2 percentage points to 70.5%, its lowest since early 2021, suggesting weakening demand.
Wage data offered mixed signals - private sector wages rose 0.6% quarter-on-quarter, ahead of forecasts, but annual wage inflation slowed to 2.2%, the lowest in over three years.
With inflation at 2.7% year-on-year in the second quarter, the Reserve Bank of New Zealand was expected to deliver one more 25 basis point rate cut from the current 3.25% this month, though it was likely to remain cautious about signalling further easing.
Australia's industrial sector meanwhile showed signs of recovery in July, led by gains in business services, while manufacturing remained under pressure.
The Ai Group Australian industry index rose 5.8 points to -3.2, its highest reading in three years.
Sales and new orders both improved, with the sales index at -8.1, the best result since August 2022, and new orders rebounding to -4.9.
However, manufacturing showed no signs of recovery, constrained by high energy costs and trade-related risks.
Employment dipped slightly to -4.0, while rising input costs and wages added to inflationary pressures.
Construction activity strengthened, and businesses cited persistent challenges in finding appropriately skilled labour, particularly in construction and labour hire.
In India, the Reserve Bank held its benchmark policy rate at 5.5%, as expected, following a 50 basis point cut in June.
RBI governor Sanjay Malhotra said the central bank would now adopt a neutral stance, having exhausted the room for further accommodative policy in the near term.
He indicated that future rate decisions would depend on incoming data and the evolving economic outlook.
Reporting by Josh White for Sharecast.com.
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