Asian Stocks Mixed as Japan Trade Woes Weigh and Australia Gains on RBA Easing

Asian markets traded mixed on Wednesday, with Japanese shares slipping amid weak trade data and Australian stocks rallying on dovish signals from the central bank. The Nikkei 225 dropped 0.3% after Japan reported an unexpected trade deficit in April, driven by slowing exports and resilient imports, underscoring the impact of U.S. tariffs. This comes ahead of a third round of Japan-U.S. trade talks, with Tokyo firm on its stance to remove tariffs.

Australian stocks climbed, with the ASX 200 up 0.8% to a three-month high. Gains in energy and gold sectors were fueled by rising oil and bullion prices, sparked by reports of Israel possibly targeting Iran’s nuclear sites. Investor sentiment was further lifted by the Reserve Bank of Australia’s 25 basis point rate cut, along with a dovish outlook signaling potential for more easing.

China’s Shanghai Composite and CSI 300 rose 0.3% and 0.6%, respectively, as the People’s Bank of China trimmed lending rates to support growth. However, gains were capped by tensions with the U.S. over chip restrictions. Beijing criticized Washington’s moves to block Huawei chips abroad, warning that such policies risk unraveling recent trade truces.

Broader market sentiment was cautious following a Moody’s U.S. credit downgrade and Fed officials warning that trade tariffs could sustain inflation, delaying interest rate cuts. Geopolitical tensions also loomed, with reports of possible Israeli military action against Iran.

South Korea’s KOSPI gained 1%, while Singapore’s Straits Times Index dipped 0.2%. Meanwhile, Gift Nifty 50 Futures signaled a flat open for Indian markets after recent losses from a seven-month high.

Global investors remained wary amid macroeconomic uncertainty, inflation risks, and escalating geopolitical developments.