Asia-Pacific Markets End Mixed Amid Shifting Sentiment on US-EU Tariff Outlook

Markets across the Asia-Pacific region closed mixed on Tuesday as investors continued to digest recent trade developments following US President Donald Trump’s decision to delay a planned 50% tariff on imports from the European Union.

The announcement provided some relief to global markets, though regional equity performance remained varied as broader concerns around economic policy and geopolitical risks lingered.

In Japan, the Nikkei 225 rose 0.51% to 37,724.11, while the broader Topix index gained 0.64%, reflecting a positive response to easing trade tensions and falling long-term bond yields. Yields on super-long Japanese government bonds (JGBs) declined after reports suggested the Ministry of Finance may reduce issuance, with the 30-year yield falling to 2.859%, the lowest since mid-May.

Meanwhile, South Korea’s Kospi fell 0.27%, snapping its upward momentum from Monday’s three-month high. The Kosdaq, however, inched up 0.25%, reflecting mixed sentiment among smaller-cap stocks amid choppy trading.

In mainland China, the CSI 300 index dropped 0.54%, despite April’s 1.4% rise in industrial profits, up from 0.8% the previous month. Hong Kong’s Hang Seng Index, by contrast, rose 0.43%, buoyed by selective buying in financials and tech sectors.

India’s benchmark indices were broadly lower, with the Nifty 50 down 0.6% and the BSE Sensex falling 0.79% as of mid-afternoon local time. The declines came amid global uncertainties and ahead of key economic data releases later in the week.

In Australia, the S&P/ASX 200 climbed 0.56% to 8,407.6, marking its third consecutive session of gains. The uptick was supported by strength in mining and energy shares, with investor sentiment lifted by rebounding commodity prices and hopes of a more stable trade environment.

Trump’s deferral of the EU tariff deadline to July 9 followed a weekend call with European Commission President Ursula von der Leyen. The move prompted a bounce in US equity futures during Asian hours, with Dow futures up 1%, S&P 500 futures gaining 1.1%, and Nasdaq futures rising 1.3%.

Market strategist Tony Sycamore of IG remarked, “It was a better night for risk assets, following Trump deferring EU tariffs back to July 9,” but cautioned that other factors — including month-end rebalancing and Nvidia’s earnings report due Wednesday — may drive sentiment through the rest of the week.

The delay also led to a modest weakening in the US dollar, which is heading for its fifth consecutive monthly decline — the longest such streak since 2017. Weaker sentiment toward the dollar has been attributed to concerns over erratic US trade policy, rising fiscal deficits, and ongoing shifts in global capital flows.

Broader Market Indicators

• MSCI’s broadest index of Asia-Pacific shares outside Japan dipped 0.17%, reflecting the region’s overall mixed tone.

• Shanghai Composite Index closed nearly flat, while Hang Seng and ASX 200 posted modest gains.

• Oil prices eased, with Brent crude down 0.1% at $64.67 per barrel, as markets awaited a potential OPEC+ decision on output changes later in the week.

• Gold retreated 0.28% to $3,332.91 an ounce, as investors continued to reassess the metal’s safe-haven appeal amid shifting dollar dynamics.

Investors in the Asia-Pacific region are expected to monitor several key events in the coming days, including speeches from Federal Reserve officials, the US core PCE inflation reading, and ongoing trade negotiations between the US and the EU. The Bank of Japan’s annual economic conference, currently underway in Tokyo, may also provide insights into how global central banks are addressing concerns around growth and inflation.

Reuters, the Wall Street Journal, CNBC contributed to this report.