Asia markets climb as U.S. growth eases trade worries

July 18, 2025 (MLN): Asian stocks climbed on Friday, mirroring Wall Street’s record-setting performance overnight, as upbeat U.S. economic data and solid corporate earnings helped ease investor concerns over trade tensions.

The MSCI Asia-Pacific index outside Japan advanced 0.8%, reaching its highest level since late 2021 and booking a 1.7% gain for the week.

Chinese blue-chip stocks edged up 0.3%, while Hong Kong’s Hang Seng index gained 1.2%.

Taiwan Semiconductor Manufacturing Company (TSMC), the key supplier of advanced AI chips, surged 2.2% in Taipei after reporting record quarterly profits.

However, the chipmaker flagged that U.S. tariffs may affect future earnings, as CNBC reported.

Japan’s Nikkei index bucked the regional trend, dipping 0.2%, as political uncertainty weighed on sentiment.

The Japanese yen hovered near 148.54 per dollar, down 0.7% for the week.

Polls suggest Prime Minister Shigeru Ishiba’s ruling coalition may lose its majority in Sunday’s upper house election.

Japan's core inflation data, released Friday, showed a slowdown in June, largely due to temporary utility bill cuts. Still, the figure remained above the Bank of Japan’s 2% target.

Rising living costs, including a spike in rice prices, have contributed to declining support for Ishiba.

“If PM Ishiba decides to resign on an election loss, USDJPY could easily break above 149.7 as it would usher in an initial period of political turbulence,” said Jayati Bharadwaj, head of FX strategy at TD Securities.

She added that the yen could strengthen if the ruling bloc retains control and quickly moves toward a trade deal with former U.S. President Donald Trump.

On Wall Street, the S&P 500 and Nasdaq closed at new highs on Thursday after stronger-than-expected U.S. retail sales and jobless claims suggested a modest economic rebound.

The data helped cool inflation worries, potentially allowing the Federal Reserve more time before considering further rate changes.

Netflix topped Wall Street’s earnings expectations for the second quarter, aided by a weaker dollar.

Still, its shares fell 1.8% in after-hours trading, with analysts noting that growth had already been priced in.

In currencies, the U.S. dollar retreated on Friday after a 0.3% gain the previous day, supported by strong economic indicators.

For the week, it is set to post a second straight gain of 0.6%, continuing its recovery from a 3-1/2 year low.

Federal Reserve Governor Christopher Waller reaffirmed his stance on a rate cut later this month, although most policymakers have signaled reluctance to act immediately.

Fed funds futures now reflect near-zero probability of a rate move in July, with a 62% chance of a cut priced in for September.

U.S. Treasury yields softened slightly in Asian trading. The 10-year yield slipped 2 basis points to 4.445%, while the two-year yield dipped to 3.8981%.

Oil prices were steady after overnight gains of $1, buoyed by continued drone strikes on Iraqi Kurdistan oil fields, marking the fourth consecutive day of regional disruption.

U.S. crude edged up 0.2% to $67.66 per barrel, while Brent also rose 0.2% to $69.68.

Both benchmarks are down roughly 1% for the week.

Spot gold prices held firm at $3,337 an ounce but remained on track for a weekly loss of 0.5%.

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