Most Asian indices edged higher on Thursday, but gains were muted as recent enthusiasm over a U.S.–China tariff thaw gave way to fresh doubts. Japan led the bounce on reports of renewed U.S.–Japan trade talks, while South Korea’s KOSPI underperformed after GDP data disappointed.
Market Moves at a Glance
Nikkei 225: +0.9%
TOPIX: +0.8%
MSCI Asia ex-Japan: +0.5%
KOSPI: –0.3% (Q1 GDP contraction offsetting strong SK Hynix earnings)
U.S. Futures: S&P 500 Futures +0.4%
Drivers of Caution
Tariff Reduction Still Remote
Trump’s Comments: President Trump signaled eventual tariff cuts on China—but only if Beijing initiates talks.
Beijing’s Silence: Chinese officials have shown little appetite to approach Washington first, tempering hopes.
Fed Independence Reprieve
Powell Threat Off: Trump walked back plans to fire Fed Chair Powell, easing one source of market volatility—but the relief is fading.
Japan’s Trade Dialogue Boost
Ministry Visit: Reports say Japan’s Economic Revitalization Minister will hold a second round of talks in the U.S.
Autos Lift: Toyota (+5%) and Honda (+2%) rallied on news auto parts might be exempted from Trump’s 25% vehicle tariffs.
Sector Valuations to Watch
Against this backdrop, understanding sector valuations can help identify pockets of relative value. Compare current P/E multiples for Technology, Industrials, and Automobiles via the? Sector PE Ratio – Market Overview APIfrom Financial Modeling Prep.This API provides up-to-date valuation metrics, helping you gauge where defensive or cyclical exposure may be most attractive.
What’s Next
Flash PMIs (Wed): Early gauge of how trade shifts impact manufacturing and services.
Korean GDP Revisions: Watch for any upward revisions that could boost the KOSPI.
Trade Announcements: Any formal schedule for U.S.–China or U.S.–Japan talks will dictate market direction.
With trade rhetoric swirling and macro data mixed, Asian markets may remain range-bound until clearer policy signals emerge. Positioning around sectors with stronger valuations and tighter fundamentals will be key in navigating this cautious environment.
