Asia-Pacific Markets Show Mixed Performance Amid Regional Data Releases and Global Economic Concerns
Asia-Pacific markets delivered a mixed performance on Friday as investors digested a broad array of economic data and assessed ongoing global financial developments.
Japan’s equity markets led gains in the region, with the Nikkei 225 rising 0.47% to close at 37,160.47 and the broader Topix advancing 0.68% to finish at 2,735.52. The gains came as Japanese inflation data revealed a 3.5% annual increase in April—its fastest pace in over two years—driven by surging rice and energy prices. The data could influence the Bank of Japan’s future rate decisions as it considers the broader impact of global trade tensions and tariffs.
Australia’s S&P/ASX 200 edged up 0.15% to 8,360.90, supported in part by broader positive sentiment in Asian equities and demand for safe-haven assets such as gold. Meanwhile, South Korea’s Kospi index ended the day flat at 2,592.09, while the Kosdaq slipped 0.24% to 715.98. Investors in South Korea were also parsing through April’s Producer Price Index figures to gauge inflationary pressures.
In China, both the Hang Seng Index and the CSI 300 showed little movement, reflecting investor caution amid geopolitical and economic uncertainties. The muted performance came despite ongoing high-level communications between the United States and China, aimed at maintaining diplomatic and economic dialogue.
Market sentiment across Asia was influenced by overnight developments in the US, where stock indices closed mixed. The Dow Jones Industrial Average was nearly flat, shedding just 1.35 points, while the S&P 500 slipped 0.04%. The Nasdaq Composite, however, gained 0.28%. Investors remained focused on the implications of rising US Treasury yields and the country’s increasing fiscal deficit, which intensified following the narrow passage of a new tax bill in the House of Representatives.
The yield on the 30-year US Treasury briefly exceeded 5%—a level not seen since 2023—raising concerns about the long-term sustainability of US debt. The move followed a recent downgrade of the US credit rating by Moody’s, which cited fiscal challenges and rising borrowing costs. Nevertheless, yields slightly retreated as some investors took advantage of attractive valuations in long-term bonds.
Meanwhile, Federal Reserve Governor Christopher Waller suggested that interest rate cuts could be possible in the second half of 2025, depending on the trajectory of US tariffs and inflation.
Singapore’s core inflation in April rose by 0.7% year over year, surpassing expectations and reflecting ongoing price pressures. In New Zealand, first-quarter retail sales were under scrutiny as investors evaluated the country’s consumer spending trends amid a high-interest rate environment.
The MSCI Asia Pacific Index climbed 0.6%, putting the regional gauge on track for a sixth straight week of gains. Analysts attributed the resilience to improving risk appetite and optimism that the worst of recent trade tensions may be easing.
In the currency markets, the US dollar weakened against most major peers, with the Bloomberg Dollar Spot Index down 0.3%, reflecting a reduced appetite for dollar-denominated assets. The euro and yen both gained ground.
Gold prices rose 0.8% to $3,322.48 per ounce, heading for their biggest weekly gain in over a month, while oil prices declined for a fourth consecutive day as investors awaited a potential production increase from OPEC+.
Bitcoin hovered near record highs but posted a modest decline of 0.3%, pausing after a five-day rally.
