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Asian Stocks Decline as Tech Weakness, Japan’s Trade Deficit, and Policy Shifts Weigh on Markets

Asian Stocks Decline as Tech Weakness, Japan’s Trade Deficit, and Policy Shifts Weigh on Markets. Source: Image by Gerd Altmann from Pixabay

Asian stock markets retreated on Wednesday after two strong sessions, as losses in major technology shares offset earlier gains. Investors also digested Japan’s latest trade data and initial policy signals from newly appointed Prime Minister Sanae Takaichi.

Following a mixed session on Wall Street, where the NASDAQ Composite slipped due to weakness in tech stocks, the S&P 500 closed nearly unchanged while the Dow Jones inched higher on upbeat corporate earnings. U.S. stock futures were steady as of 02:55 GMT.

Japan’s latest trade figures showed exports rising for the first time in five months but missing expectations, while imports surged sharply, resulting in an unexpected trade deficit of ¥234.6 billion ($1.54 billion). Analysts at ING noted that strong global demand offset weak U.S. exports and projected a gradual recovery ahead.

Political developments in Tokyo added to investor caution as Takaichi, Japan’s first female prime minister, was sworn in on Tuesday. Her 19-member cabinet features Finance Minister Satsuki Katayama, Foreign Minister Toshimitsu Motegi, and Defense Minister Shinjiro Koizumi. Takaichi has vowed to revive “Abenomics-style” policies emphasizing fiscal stimulus and economic security. However, analysts warn her administration faces challenges balancing growth with Japan’s massive public debt and addressing inflation and geopolitical tensions.

The Nikkei 225 fell 0.5% to 49,066.75 after touching a record high in the previous session, while the TOPIX index traded slightly higher. Across the region, China’s CSI 300 dipped 0.2%, Hong Kong’s Hang Seng fell 0.5%, and Australia’s ASX 200 slid 0.9%. In contrast, South Korea’s KOSPI rose 0.4%.

U.S.-China tensions persisted after President Donald Trump hinted at uncertainty over his meeting with Chinese President Xi Jinping, while reports suggested India and the U.S. are close to a trade deal that could cut Indian export tariffs significantly.

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