Asian stocks slip from highs, dollar gains ahead of crucial 'tariff' week

 

Asian shares eased from highs on Friday, with Japanese markets retreating from a record peak, as investors locked in profits ahead of a crucial week that includes US President Donald Trump's tariff deadline and a host of central bank meetings.

The dollar gained against the yen after bouncing off a two-week low on Thursday, helped by some firm US economic data, while Japan's currency was weighed down by political uncertainty amid media reports Prime Minister Shigeru Ishiba will step down.

Benchmark Japanese government bond yields hovered just below the highest since 2008.

Japan's broad Topix index, which had jumped more than 5 per cent over the previous two sessions to reach an all-time high, pulled back 0.7 per cent. The Nikkei slipped 0.5 per cent from Thursday's one-year high.

Hong Kong's Hang Seng lost 0.5 per cent and mainland Chinese blue chips declined 0.2 per cent. Australia's equity benchmark declined 0.5 per cent.

At the same time, US S&P 500 futures added 0.2 per cent, after the cash index edged up slightly to a new record closing high overnight, buoyed by robust earnings from Google parent Alphabet. The tech-heavy Nasdaq also marked a record high.

MSCI's gauge of stocks across the globe edged down 0.1 per cent, but remained just below an all-time peak from Thursday. The index is on course for a 1.3 per cent weekly advance, buoyed in large part by optimism for US trade deals with the European Union and China, following an agreement with Japan this week.

Next week, in the US alone, investors need to contend with Trump's August 1 deadline for trade deals, a Federal Reserve policy meeting, the closely watched monthly payrolls report, and earnings from the likes of Amazon, Apple, Meta and Microsoft.

The Bank of Japan has its own policy announcement on Thursday, and Prime Minister Ishiba's Liberal Democratic Party holds a meeting the same day.

That's after the European Central Bank held rates steady on Thursday, pausing its easing campaign as it waits to assess any impact from US tariffs.

The euro ended the session down 0.2 per cent against a buoyant dollar, and was little changed on Friday at $1.1743.

The US currency advanced 0.3 per cent to 147.37 yen, adding to Thursday's 0.4 per cent gain.

Trump kept the pressure on Fed Chair Jerome Powell to cut rates after a rare presidential visit to the central bank on Thursday, although he said he did not intend to fire Powell, as he has frequently suggested he would.

US 10-year Treasury yields edged down to 4.39 per cent on Friday, effectively erasing an advance on Thursday. [US/]

Equivalent Japanese government bond yields eased 0.5 basis point to 1.595 per cent, just off this week's high of 1.6 per cent, a level last seen in October 2008.

JGB yields have been rising on concerns the political scale is tilting more towards fiscal stimulus, after big gains for opposition parties backing consumption tax cuts in Sunday's upper house election. Pressure is building on the more fiscally hawkish Ishiba to quit after his coalition lost its majority in the vote, after doing the same in lower house elections last October.

Gold was flat at around $3,368 per ounce, keeping it on course for a 0.5 per cent rise this week.

Brent crude futures gained 0.3 per cent to $69.35 a barrel, while US West Texas Intermediate crude futures added 0.2 per cent to $66.18 per barrel. [O/R]