Asian stock markets are witnessing a decline due to uncertainties regarding US tariffs and the lack of updates on trade agreements ahead of the July 9 deadline.
Decline of Asian Stock Indices
MSCI’s Asia-Pacific index outside Japan fell by 0.23%, retreating from the record high achieved last week. The Japanese Nikkei 225 sank by 0.78%, weighed down by losses in technology stocks. In Taiwan, the tech-heavy Taiex index has retreated by 0.31%, while South Korea’s Kospi has also lost ground by 0.87%, mirroring the pullback in US technology firms.
Dollar's Impact on the Economy
The dollar hovers near its weakest levels in over three years due to expectations of rate cuts in the US. At present, market expectations foresee about 64 basis points of cuts in 2025 with only a 21% chance of a reduction in July. This downward pressure on the dollar also intensifies due to uncertainties surrounding the latest US economic data set to be released on Thursday.
Trade Agreements and Their Significance
President Trump has indicated he will not extend the deadline for reaching new trade agreements, expressing doubts about a deal with Japan while remaining confident that an agreement with India could be finalized in time. Meanwhile, investors are focused on recently passed tax and spending measures which passed the Senate by the slimmest margin.
The complex situation in global markets highlights the importance of monitoring economic indicators and trade agreements. The dollar continues to weaken as stock indices exhibit uncertainty amid rising risks.
