Asian markets opened cautiously on Thursday, with investors weighing corporate earnings, inflation data, and central bank trajectories ahead of a packed global calendar. Despite mixed signals from Wall Street and weaker-than-expected data from South Korea, most major indices held firm, reflecting a tentative but resilient risk appetite across the region.
Nikkei dips as yen strengthens
Japan’s Nikkei 225 edged down 0.4% in early trading as the yen firmed against the dollar, touching its highest level in nearly three weeks. A stronger yen weighed on export-heavy stocks such as Toyota and Sony, despite optimism in domestic retail and tech. Investors are watching closely for commentary from the Bank of Japan, with speculation growing that it may adjust its yield curve control policy sooner than expected if inflation persists above target.
China markets flat despite stimulus hopes
Mainland Chinese shares opened flat after a muted session in New York. The Shanghai Composite was largely unchanged, while Hong Kong’s Hang Seng dipped slightly as property developers faced renewed selling pressure. Beijing’s efforts to stabilise the sector have so far failed to trigger lasting investor confidence. However, expectations for targeted fiscal measures and possible rate cuts remain high, especially ahead of next month’s Politburo meeting.
South Korea and Australia post mixed results
South Korea’s Kospi fell 0.7% following a worse-than-expected GDP reading, which showed growth slowing to 0.2% quarter-on-quarter. Semiconductor stocks led the losses, with SK Hynix down over 2%. In contrast, Australia’s ASX 200 rose 0.3%, buoyed by strong gains in commodity-linked shares. Iron ore and gold miners advanced as global prices held firm amid geopolitical tensions and dollar weakness.
Eyes on Europe and the US
European markets are set for a subdued open as traders await the latest ECB rate decision and key earnings from energy and banking giants. Futures suggest a flat start for the DAX, FTSE 100, and CAC 40. While no change in interest rates is expected from the ECB, markets will scrutinise President Christine Lagarde’s tone for clues on timing for a first rate cut, likely in September or October.
In the US, focus will turn sharply to earnings, with Apple, Meta, and Intel reporting after the bell. With markets hovering near record highs, any earnings miss or cautious outlook could trigger sharp swings. Futures on the S&P 500 and Nasdaq were flat in early European trading. Meanwhile, jobless claims data and durable goods orders later today will feed into expectations for the Federal Reserve’s next move. Analysts are divided on whether the Fed can begin easing in Q4 if inflation continues its gradual retreat.
Volatility remains low but watch for catalysts
Despite the uncertainty, volatility indices remain subdued, suggesting market complacency or confidence depending on interpretation. That could change quickly if macroeconomic data or earnings significantly surprise. With summer volumes thin and multiple event risks on the horizon, traders are being warned not to overextend positions.
REFH – Newshub, 25 July 2025
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