(Sharecast News) - Asia-Pacific markets were mixed on Friday, with most major indices edging lower as investors awaited clarity on US trade policy ahead of a potential tariff hike next week by president Donald Trump.
A strong US jobs report overnight briefly buoyed sentiment on Wall Street, with the S&P 500 and Nasdaq hitting fresh record highs.
"US investors may have been feeling optimistic heading into the long Independence Day weekend, but that positivity did not extend to Asia," said TickMill market strategy partner Patrick Munnelly.
"Confidence in the resilience of the US economy, buoyed by unexpectedly strong monthly payroll figures, has quickly been overshadowed by uncertainty as president Donald Trump approaches the 9 July deadline for increased tariff rates.
"Despite earlier assurances from Trump and his team about a surge in trade agreements, the announcement of a deal with Vietnam brings the total to only three, which include preliminary agreements with Britain and China."
Munnelly noted that Trump's stance on tariffs had adjusted accordingly, with Trump mentioning that letters would be sent to trading partners on Friday outlining the duties they would incur on trade with the United States.
"Treasury secretary Scott Bessent indicated a deal with India is forthcoming, but discussions with Japan and South Korea - initially seen as likely early successes - have been stalled for weeks.
"The deal with Vietnam also poses a risk of upsetting China by imposing 40% tariffs on so-called trans-shipments of products primarily made elsewhere - for example, China - to obtain a 'made in Vietnam' label.
"Some Asian nations may be hopeful they've taken sufficient steps to alleviate US concerns and will only face the standard 10% tariff in their notifications."
Markets mixed ahead of next week's US tariff deadline
In Japan, the Nikkei 225 rose slightly by 0.06% to close at 39,810.88, supported by gains in tech and utilities.
Dainippon Screen Manufacturing advanced 3.26%, Tokyo Electric Power rose 2.7%, and Fujitsu added 2.55%.
The broader Topix index, however, slipped 0.04% to 2,827.95.
China's mainland markets saw divergent performances - the Shanghai Composite gained 0.32% to 3,472.32, lifted by sharp advances in port and steel stocks, with Jinzhou Port B up 12%, Jinzhou Port A rising 10.64%, and Lingyuan Iron & Steel climbing 10.16%.
In contrast, the Shenzhen Component fell 0.25% to 10,508.76.
Hong Kong's Hang Seng Index declined 0.64% to 23,916.06.
Alibaba Health Information Technology plunged 8.64%, AIA Group lost 4.42%, and Techtronic Industries fell 3.11%, dragging the benchmark lower.
South Korea's Kospi 100 posted the steepest drop in the region, falling 1.86% to 3,089.68.
Heavy losses came from Mirae Asset Daewoo Securities, down 10.07%, Hyundai-Rotem, which fell 7.9%, and HD Korea Shipbuilding & Offshore Engineering, which slid 7.11%.
Australia's S&P/ASX 200 edged up 0.08% to 8,603.00.
Financial and industrial names outperformed, with AMP up 5.17%, Corporate Travel Management rising 4.18%, and ARB Corporation gaining 3.62%.
Across the Tasman Sea, New Zealand's S&P/NZX 50 rose 0.49% to 12,766.60.
Infratil added 3.06%, Eroad gained 2.84%, and Summerset Group advanced 2.68%.
In currency markets, the dollar was last down 0.41% on the yen to trade at JPY 144.34, while it firmed 0.16% against the Aussie to AUD 1.5243, and edged up 0.07% on the Kiwi, changing hands at NZD 1.6485.
Oil prices declined, with Brent crude futures last down 1.15% on ICE at $68.01 per barrel, and the NYMEX quote for West Texas Intermediate falling 1.13% at $66.24.
Japan household spending rises, Bank Indonesia could cut rates further
In economic news, Japan's household spending rose more than expected in May, marking its strongest annual increase since August 2022 and offering a potential signal of resilient consumer demand.
Official data released Friday showed real household spending climbed 4.7% from a year earlier, well above the 1.2% rise forecast by economists in Reuters polling.
Average monthly spending stood at JPY 316,085, while household income edged up 0.4% year-on-year in real terms to JPY 522,318.
The data is closely watched by the Bank of Japan as it assesses the strength of domestic demand in setting monetary policy.
In Indonesia, central bank officials signalled a third interest rate cut may be on the way, following two reductions earlier this year.
Bank Indonesia governor Perry Warjiyo said the move aimed to support a slowing economy, which expanded at its weakest pace in more than three years in the first quarter.
Meanwhile, Jakarta was reportedly preparing to sign a $34bn trade agreement with the United States just days before new US tariffs take effect on 9 July.
According to coordinating minister Airlangga Hartarto, the deal would include increased imports of US fuels and Indonesian investments in American energy and agriculture sectors.
Reporting by Josh White for Sharecast.com.
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