Asian markets weaker

Most Asian stocks fell on Friday as a rally prompted by cooling U.S. inflation data fizzled, while Japanese shares rose following the Bank of Japan’s (BOJ) unexpected decision to maintain its bond buying program. Chinese markets were the worst performers due to new European Union tariffs on major Chinese electric vehicle makers, raising fears of retaliatory measures from Beijing. Despite record highs in the S&P 500 and NASDAQ Composite, broader U.S. stock index futures were muted in Asian trade.

Japanese indices, the Nikkei 225 and TOPIX, increased by 0.7% and 0.3%, respectively, as the BOJ announced no immediate changes to its bond purchases, hinting at a potential reduction plan for late July. This suggested a continuation of Japan’s loose monetary policy, favorable for local stocks. However, doubts remain about the BOJ’s ability to tighten policy due to economic weakness.

Chinese indices, including the Shanghai Shenzhen CSI 300 and the Shanghai Composite, fell 0.6% and 0.4%, respectively, while the Hang Seng index dropped 0.6%, affected by the EU’s steep tariffs on Chinese electric vehicles, with SAIC Motor Corp Ltd hit hardest. Broader Asian markets saw declines, with Australia’s ASX 200 down 0.3% and India’s Nifty 50 futures indicating a flat open. South Korea’s KOSPI rose 0.3% on sustained strength in technology stocks.