(Sharecast News) - Asia-Pacific markets traded mixed on Tuesday as investors awaited further developments in US-China trade talks, which resumed in London for a second day.
High-level discussions on Monday involved US Treasury secretary Scott Bessent, commerce secretary Howard Lutnick, and trade representative Jamieson Greer meeting with Chinese vice-premier He Lifeng.
"At the centre of yesterday's economic maelstrom was China's May 'data dump' - a reality check dressed up in mixed signals," said SPI Asset Management managing partner Stephen Innes.
"Headline exports rose 4.8% year-on-year, but the real story was in the fracture lines.
Shipments to the US declined 34.4% - the most significant drop since the early Covid-19 crash - while exports to the rest of the world increased 11.4%."
Innes said the message was "unambiguous" - the American consumer was no longer the gravitational anchor of China's export galaxy.
"Released just as US-China trade envoys squared off in London, the numbers underscored what markets have suspected for months - strategic decoupling isn't a threat; it's already happening.
"The London talks themselves? Less détente, more diplomatic chess.
"There was some polite handshake optics - US commerce secretary Howard Lutnick called the talks 'fruitful', while Treasury's Scott Bessent gave the diplomatic thumbs-up, citing a 'good meeting'."
Markets mixed with all eyes on trade talks
In Japan, the Nikkei 225 fell 0.32% to 38,211.51, with losses outweighing gains despite strong performances from several individual names.
Sumitomo Dainippon Pharma jumped 8.78%, Shiseido rose 6.26%, and Nidec added 4.26%.
The broader Topix index edged up 0.03% to 2,786.24.
Mainland Chinese markets declined, led by steep drops in several large-cap stocks.
The Shanghai Composite shed 0.44% to close at 3,384.82, while the Shenzhen Component fell 0.86% to 10,162.18.
Dr Peng Telecom and Media Group plummeted 62.9%, Lonyer Fuels dropped 35.16%, and Zhejiang Kanglongda Special Protection Technology fell 10%.
Hong Kong's Hang Seng Index eased 0.08% to 24,162.87.
Among the laggards were Li Auto, down 2.75%, Meituan, which lost 2.7%, and Galaxy Entertainment Group, which slipped 2.22%.
South Korea's Kospi 100 gained 0.39% to finish at 2,874.67.
The index was lifted by strong gains in KakaoPay, up 15.96%, Doosan Bobcat, up 9.79%, and Hyundai-Rotem, which advanced 9.71%.
Australia's S&P/ASX 200 rose 0.84% on its return from a long weekend, to a record closing high of 8,587.20.
Gains were broad-based, with Austal rising 7.28%, Zip Co up 6.39%, and Mesoblast gaining 6.27%.
In New Zealand, the S&P/NZX 50 climbed 0.2% to 12,564.42.
Tourism Holdings rose 2.17%, A2 Milk Company gained 2.07%, and Eroad was up 2%.
In currency markets, the dollar was last up 0.07% on the yen to trade at JPY 144.67, while it gained 0.18% against the Aussie to AUD 1.5373, and advanced 0.16% on the Kiwi, changing hands at NZD 1.6563.
Oil prices were marginally higher, with Brent crude futures last up 0.24% on ICE to $67.20 per barrel, and the NYMEX quote for West Texas Intermediate gaining 0.21% to $65.43.
Japan set to avoid recession despite risks, says Nomura
In economic news, Japan was tipped to avoid a recession despite the potential drag from US tariffs, according to analysts at Nomura.
In a note released on Tuesday, the investment bank said the country's services-led growth and anticipated stimulus would help cushion any economic slowdown.
Nomura pointed to corporate investment in software and efforts to ease labour shortages as additional support for economic resilience.
While the analysts acknowledged that the new US tariffs could create "downward pressure" between July and September, they maintained a positive outlook for Japan's near-term trajectory.
They also forecast that the Bank of Japan would begin raising interest rates from January 2026.
The comments coincided with remarks from Bank of Japan governor Kazuo Ueda, who reiterated the central bank's readiness to tighten policy further if inflation shows sustained momentum.
Reporting by Josh White for Sharecast.com.
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