Caution Prevailed In Tokyo Trading Ahead of Upper House Elections

Investors in Tokyo stayed on the sidelines ahead of the Upper House elections, and the Japanese yen traded near a three-year low of !49 against the U.S. dollar.

The Nikkei 225 Stock Average and the broader Topix lacked direction amid weak market sentiment, and caution prevailed. 

Japan's benchmark indexes have struggled as investors grapple with international trade uncertainty, a possible increase in fiscal spending financed by additional debt, and the rising likelihood of the ruling coalition government losing its grip on power. 

Moreover, automobile companies faced additional headwinds amid elevated U.S. tariffs and rising global competition from the Chinese electric vehicle makers.

On the economic front, sentiment among large Japanese manufacturers improved in July amid a rebound in expectations in the semiconductor-related companies. 

The Reuters Tankan Index for Japanese manufacturers improved to +7 in July from +6 in June, marking the first increase in three months. 

While overall sentiment improved, manufacturers are worried about the potential abrupt changes in the U.S. trade policy.

Japan Indexes and Stocks 

The Nikkei 225 Stock Average increased 0.4% to 39,841.01, and the broader Topix edged up 0.03% to 2,826.34. 

Tokyo Electron advanced 3.7% to 2,826.34, Advantest Corp. increased 2.2% to ¥11,980.0, Disco Corp. inched higher 1.9% to ¥47,110.0, and Lasertec Corp. gained 3.5% to ¥19,760.0. 

Aeon Co. Ltd. increased 1.2% to ¥4,476.0, Fast Retailing edged down 0.7% to ¥44,620.0, Takashimaya Co. Ltd. fell 1% to ¥1,114.0, and Isetan Mitsukoshi Holdings Ltd. decreased 0.2% to ¥2,127.0.

Caution Prevailed In Tokyo Trading Ahead of Upper House Elections

Investors in Tokyo stayed on the sidelines ahead of the Upper House elections, and the Japanese yen traded near a three-year low of !49 against the U.S. dollar.

The Nikkei 225 Stock Average and the broader Topix lacked direction amid weak market sentiment, and caution prevailed. 

Japan's benchmark indexes have struggled as investors grapple with international trade uncertainty, a possible increase in fiscal spending financed by additional debt, and the rising likelihood of the ruling coalition government losing its grip on power. 

Moreover, automobile companies faced additional headwinds amid elevated U.S. tariffs and rising global competition from the Chinese electric vehicle makers.

On the economic front, sentiment among large Japanese manufacturers improved in July amid a rebound in expectations in the semiconductor-related companies. 

The Reuters Tankan Index for Japanese manufacturers improved to +7 in July from +6 in June, marking the first increase in three months. 

While overall sentiment improved, manufacturers are worried about the potential abrupt changes in the U.S. trade policy.

Japan Indexes and Stocks 

The Nikkei 225 Stock Average increased 0.4% to 39,841.01, and the broader Topix edged up 0.03% to 2,826.34. 

Tokyo Electron advanced 3.7% to 2,826.34, Advantest Corp. increased 2.2% to ¥11,980.0, Disco Corp. inched higher 1.9% to ¥47,110.0, and Lasertec Corp. gained 3.5% to ¥19,760.0. 

Aeon Co. Ltd. increased 1.2% to ¥4,476.0, Fast Retailing edged down 0.7% to ¥44,620.0, Takashimaya Co. Ltd. fell 1% to ¥1,114.0, and Isetan Mitsukoshi Holdings Ltd. decreased 0.2% to ¥2,127.0.

China Tech Rally Lost Steam as Investors Refocus On Domestic Economic Issues

The early tech rally in Hong Kong fizzled out, and market indexes wavered around the flatline. 

The Hang Seng Index advanced 1%, and the mainland-focused CSI 300 index fell 0.3% after investors reassessed the latest batch of mixed economic data. 

China's economy has been resilient amid U.S. trade barriers, but the looming U.S. tariffs, protracted property market weakness, and weakening consumer confidence are keeping investors on edge 

China's second-quarter GDP growth and retail sales met investor expectations, but the weakness in the residential market and property investment dampened investor sentiment. 

Moreover, the jobless rate held steady at 5% in June, despite the ongoing business disruption in the export sector compounded by the weakness in the property market. 

Investors view China's employment data with deep skepticism, with most estimating the jobless rate closer to 9% and youth unemployment as high as 35%. 

China Stocks and Indexes 

The Hang Seng index increased 0.5% to 24,703.06, and the mainland-focused CSI 300 index edged down 0.3% to 4,007.81. 

Tech stocks led the market rebound after the California-based Nvidia said it plans to resume selling advanced graphic chips to China that meet the U.S. export guidelines. 

SMIC added 1.3% to HK $46.20, Xiaomi Corp. increased 0.4% to HK $57.90, and BYD Electronic International decreased 0.3% to HK $33.60. 

Huadian New Energy Group soared more than 180% to 8.90 yuan after the company listed its shares on the Shanghai Stock Exchange. 

The company sold about 5 billion shares and raised 18 billion yuan in an initial public offering and plans to use the proceeds to finance new wind and solar power projects. 

China Tech Rally Lost Steam as Investors Refocus On Domestic Economic Issues

The early tech rally in Hong Kong fizzled out, and market indexes wavered around the flatline. 

The Hang Seng Index advanced 1%, and the mainland-focused CSI 300 index fell 0.3% after investors reassessed the latest batch of mixed economic data. 

China's second-quarter GDP growth and retail sales met investor expectations, but the weakness in the residential market and property investment dampened investor sentiment. 

Moreover, the jobless rate held steady at 5% in June, despite the ongoing business disruption in the export sector compounded by the weakness in the property market. 

Investors view China's employment data with deep skepticism, with most estimating the jobless rate closer to 9% and youth unemployment as high as 35%. 

China Stocks and Indexes 

The Hang Seng index increased 0.5% to 24,703.06, and the mainland-focused CSI 300 index edged down 0.3% to 4,007.81. 

Tech stocks led the market rebound after the California-based Nvidia said it plans to resume selling advanced graphic chips to China that meet the U.S. export guidelines. 

SMIC added 1.3% to HK $46.20, Xiaomi Corp. increased 0.4% to HK $57.90, and BYD Electronic International decreased 0.3% to HK $33.60. 

Huadian New Energy Group soared more than 180% to 8.90 yuan after the company listed its shares on the Shanghai Stock Exchange. 

The company sold about 5 billion shares and raised 18 billion yuan in an initial public offering and plans to use the proceeds to finance new wind and solar power projects. 

U.S. Inflation Accelerates In June as Trump's Tariffs Lift Prices, Big Banks Kick Off Earnings

Wall Street indexes traded higher as investors reviewed positive earnings from big banks, the inflation report, and Nvidia's announcement. 

The S&P 500 index edged up 0.2%, and the tech-focused Nasdaq Composite advanced 0.4%. 

Consumer price inflation accelerated for the second consecutive month in June, the highest level since February. 

The annual inflation rate increased to 2.7% from 2.4% in May, and core inflation rose to 2.9% from 2.8%, the U.S. Bureau of Labor Statistics reported Tuesday. 

On a monthly basis, the headline inflation accelerated to 0.3% from 0.1% in May, the largest increase in five months. 

The increase in inflation was driven by faster price increases in food, used car prices, and transportation services, and a smaller decline in energy prices. 

However, shelter or housing inflation eased slightly to 3.8% from 3.9% but stayed elevated. 

U.S. Stock Movers

JPMorgan Chase & Company decreased 0.7% to $286.70, and the New York-based bank reported better-than-expected quarterly earnings. 

Revenue in the second quarter declined 10% to $45.7 billion, and net income dropped 17% to $14.9 billion, or $5.24 per share. 

Fixed-income trading increased 14% to $5.7 billion, equities trading revenue rose 15% to $3.2 billion, and investment banking fees advanced 7% to $2.5 billion. 

The bank said provision for credit losses was $2.8 billion, lower than the $3.1 billion estimated by analysts. 

Wells Fargo decreased 3.8% to $80.30, and the California-based bank lowered its 2025 net income outlook from the increase between 1% and 3% to match earnings in the previous year.

However, the bank reported better-than-expected quarterly results in the second quarter. 

Citigroup Inc. jumped 1.9% to $89.20 after the bank's results surpassed market expectations. 

Revenue in the quarter was $21.7 billion, net income soared 25% to $4.02 billion, and earnings per share were $1.96. 

The company guided full-year revenue to be near the upper end of its previous guidance of $84 billion, and the company raised its dividend to 60 cents per share from 56 cents after the completion of the stress test on July 2.

Nvidia Corp. advanced 4% to $171.18, and the company's chief executive said it is confident that it will receive an approval from the U.S. government to sell its advanced H20 graphic chip to China.

U.S. Stocks Advance as Inflation Accelerates, Big Banks Kick Off Earnings

Wall Street indexes traded higher as investors reviewed positive earnings from big banks, the inflation report, and Nvidia's announcement. 

The S&P 500 index edged up 0.2%, and the tech-focused Nasdaq Composite advanced 0.4%. 

Consumer price inflation accelerated for the second consecutive month in June, the highest level since February. 

The annual inflation rate increased to 2.7% from 2.4% in May, and core inflation rose to 2.9% from 2.8%, the U.S. Bureau of Labor Statistics reported Tuesday. 

On a monthly basis, the headline inflation accelerated to 0.3% from 0.1% in May, the largest increase in five months. 

The increase in inflation was driven by faster price increases in food, used car prices, and transportation services, and a smaller decline in energy prices. 

However, shelter or housing inflation eased slightly to 3.8% from 3.9% but stayed elevated. 

U.S. Stock Movers

JPMorgan Chase & Company decreased 0.7% to $286.70, and the New York-based bank reported better-than-expected quarterly earnings. 

Revenue in the second quarter declined 10% to $45.7 billion, and net income dropped 17% to $14.9 billion, or $5.24 per share. 

Fixed-income trading increased 14% to $5.7 billion, equities trading revenue rose 15% to $3.2 billion, and investment banking fees advanced 7% to $2.5 billion. 

The bank said provision for credit losses was $2.8 billion, lower than the $3.1 billion estimated by analysts. 

Wells Fargo decreased 3.8% to $80.30, and the California-based bank lowered its 2025 net income outlook from the increase between 1% and 3% to match earnings in the previous year.

However, the bank reported better-than-expected quarterly results in the second quarter. 

Citigroup Inc. jumped 1.9% to $89.20 after the bank's results surpassed market expectations. 

Revenue in the quarter was $21.7 billion, net income soared 25% to $4.02 billion, and earnings per share were $1.96. 

The company guided full-year revenue to be near the upper end of its previous guidance of $84 billion, and the company raised its dividend to 60 cents per share from 56 cents after the completion of the stress test on July 2.

Nvidia Corp. advanced 4% to $171.18, and the company's chief executive said it is confident that it will receive an approval from the U.S. government to sell its advanced H20 graphic chip to China.

European Markets Attempted to Rebound, Eurozone Industrial Production Expanded In May

European stock market indexes rebounded from modest losses in the previous session as traders awaited an update on trade negotiations with the U.S.

Benchmark indexes in Frankfurt, Paris, Milan, and London edged higher, and the euro and the pound traded at multi-year highs. 

On the economic front, the Euro Area's  industrial production in May increased 1.7% from the previous month, according to Eurostat. 

The industrial production rebounded from a decline of 2.2% in April, driven by a rebound in energy output to 3.7% from a decline in 2.8%, capital goods production to 2.7% from a fall of 1.3%, and non-durable consumer goods production to 8.5% from a decline of 5.7% in the previous month. 

Industrial production on an annual basis, accelerated to 3.7% in May from 0.2% in April. 

Europe Stock Movers 

Experian plc jumped 4.9% to 4,040.0 pence after the credit reporting company reported better-than-expected revenue growth in the latest quarter. 

In  addition, the company reiterated its annual outlook, despite the ongoing macroeconomic headwinds. 

Barratt Redrow PLC dropped 7.2% to 386.63 pence despite the homebuilder reporting full-year results in line with expectations and reiterating its medium-term outlook. 

The company said it launched its £50 million stock repurchase plan immediately and to be completed by the end of 2025, followed by a second phase of £50 million plan to be completed by June 2026.  

Ericsson decreased 3.5% to SEK 74.50, and the company reported a better-than-expected earnings despite hit by the U.S. tariffs. 

Revenue in the second quarter declined 6% to SEK 56.1 billion from SEK 59.8 billion, net income swung to a profit of SEK 4.6 billion from a loss of SEK 11 billion, and diluted earnings per share rose to SEK 1.37 from a loss  of  SEK 3.34 a year ago. 

Net income in the last year included asset impairment charges of SEK 11.4 billion. 

The strengthening of Swedish kronor across several currencies negatively impacted  sales by as much as SEK 5 billion, according to a company's presentation.    

European Markets Attempted to Rebound, Eurozone Industrial Production Expanded In May

European stock market indexes rebounded from modest losses in the previous session as traders awaited an update on trade negotiations with the U.S.

Benchmark indexes in Frankfurt, Paris, Milan, and London edged higher, and the euro and the pound traded at multi-year highs. 

On the economic front, the Euro Area's  industrial production in May increased 1.7% from the previous month, according to Eurostat. 

The industrial production rebounded from a decline of 2.2% in April, driven by a rebound in energy output to 3.7% from a decline in 2.8%, capital goods production to 2.7% from a fall of 1.3%, and non-durable consumer goods production to 8.5% from a decline of 5.7% in the previous month. 

Industrial production on an annual basis, accelerated to 3.7% in May from 0.2% in April. 

Europe Stock Movers 

Experian plc jumped 4.9% to 4,040.0 pence after the credit reporting company reported better-than-expected revenue growth in the latest quarter. 

In  addition, the company reiterated its annual outlook, despite the ongoing macroeconomic headwinds. 

Barratt Redrow PLC dropped 7.2% to 386.63 pence despite the homebuilder reporting full-year results in line with expectations and reiterating its medium-term outlook. 

The company said it launched its £50 million stock repurchase plan immediately and to be completed by the end of 2025, followed by a second phase of £50 million plan to be completed by June 2026.  

Ericsson decreased 3.5% to SEK 74.50, and the company reported a better-than-expected earnings despite hit by the U.S. tariffs. 

Revenue in the second quarter declined 6% to SEK 56.1 billion from SEK 59.8 billion, net income swung to a profit of SEK 4.6 billion from a loss of SEK 11 billion, and diluted earnings per share rose to SEK 1.37 from a loss  of  SEK 3.34 a year ago. 

Net income in the last year included asset impairment charges of SEK 11.4 billion. 

The strengthening of Swedish kronor across several currencies negatively impacted  sales by as much as SEK 5 billion, according to a company's presentation.    

Japan's Nikkei 225 Closed Up Following a Rebound In Semiconductor Equipment Makers

Japan's stocks recouped losses of the previous session following a rebound in technology stocks. 

The Nikkei 225 Stock Average closed up 0.5%, and the broader Topix edged up 0.1%. 

Tech stocks led the rebound in Tokyo after Nvidia's CEO Jensen Huang said that the company can soon resume selling advanced chips to China, meeting the guidelines set by the U.S. 

Investors reviewed the latest batch of economic data from China, which confirmed that the economy is resilient despite the ongoing tariff tensions in the U.S. 

China's second quarter GDP expanded at an annual pace of 5.2%, slower than the 5.4% in the first quarter, the National Bureau of Statistics reported Tuesday.

New property prices in June fell 0.3% from the previous month, faster than the 0.2% rate in the previous month, signaling ongoing demand weakness. 

Domestically, investors awaited the release of inflation and international trade data later this week.

Japan's 10-year bond yield rose to 1.59%, the highest since 2008, amid expectations that the fiscal spending is likely to expand ahead of the Upper House election this Sunday. 

The yen hovered at a two-month low of 147 against the U.S. dollar, as traders worried about the persistent trade tensions with the U.S.

Japan Stocks and Indexes 

The Nikkei 225 Stock Average edged up 0.5% to 39,678.02, and the broader Topix gained 0.1% to 2,825.31. 

Tokyo Electron Ltd. increased 3.4% to ¥27,410.0; Advantest Corp. gained 1.8% to ¥11,720.0; and Disco Corp. jumped 4.4% to ¥46,250.0. 

Seven & I Holdings decreased 0.1% to ¥2,198.50, Fast Retailing advanced 1.8% to ¥44,920.0, and Aeon Co. Ltd. added 0.2% to ¥4,421.0.