Asia markets mixed amid U.S.-Indonesia trade deal

July 16, 2025 (MLN): Asia-Pacific markets were mixed on Wednesday amid shifting global trade and economic signals, including a newly revealed trade deal between the United States and Indonesia.

U.S. President Donald Trump stated on Tuesday that a preliminary agreement had been finalized, featuring a 19% tariff on Indonesian exports to the U.S, as CNBC reported.

Indonesian equities edged up slightly in response to the trade announcement, while chip stocks across Asia advanced after the U.S. lifted export restrictions on China.

Taiwan's benchmark rose 0.5%, and Hong Kong's Hang Seng gained 0.8%, extending Tuesday’s 1.6% rally fueled by tech shares.

However, South Korea’s KOSPI and Australia’s equity benchmark each slipped around 0.6%.

Mainland Chinese blue chips dipped 0.1%, and Japan’s Nikkei remained flat, fluctuating between minor gains and losses, supported by Nvidia’s strong performance and a weaker yen.

The tech sector remained firm following a 4% overnight surge in AI-favorite Nvidia. Meanwhile, Brent crude hovered around $69 per barrel.

On the macroeconomic front, U.S. data showed consumer prices increased by 0.3% in June—matching forecasts but marking the largest rise since January.

The rise was linked to the Trump administration's intensifying tariff policy, which economists say drove up costs for goods such as coffee and home furnishings.

With inflationary pressure mounting, the Federal Reserve has maintained interest rates, awaiting clearer signals on tariff impacts.

Fed Chair Jerome Powell and several colleagues had anticipated summer inflationary effects, a view supported by the latest data.

Taylor Nugent, senior economist at National Australia Bank, noted in a podcast that this outcome has led to "a fairly significant trimming of Fed expectations" regarding rate cuts.

Currently, traders are pricing in 43 basis points of rate reductions for the remainder of the year, with a 56.5% probability of a quarter-point cut in September.

Eyes now turn to U.S. producer price data set for release on Wednesday for further signs of inflation pressure at the manufacturing level.

In currency markets, the euro ticked up 0.1% to $1.1612, recovering from Tuesday’s three-week low of $1.1593.

The U.S. dollar strengthened, particularly against the yen, as Treasury yields climbed to their highest level in over a month.

Bitcoin rebounded about 1% to $117,696 after a recent 6% drop from Monday’s all-time high of $123,153.22.

Meanwhile, U.S. S&P 500 futures eased 0.2%, following a 0.4% decline in the previous cash session.

Trump also stated that cryptocurrency regulation bills—previously stalled—now appear to have enough support to progress.

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