(Sharecast News) - Asia-Pacific markets were mixed on Wednesday after US president Donald Trump ruled out an extension to the 1 August deadline for new tariffs.
Trump also announced a 50% tariff on copper imports and warned of further duties, including up to 200% tariffs on pharmaceutical exports, which he said would come into effect in "a year, year and a half".
Patrick Munnelly, market strategy partner at TickMill, said Chinese stocks were poised to achieve their best closing figures in three years, as investors speculated on potential measures to alleviate deflationary pressures and invigorate the economy.
"The Shanghai Composite increased by as much as 0.4%, reaching its highest point this year," he noted, although it had slipped back by the time markets closed.
"Data released Wednesday indicated that China's factory deflation has continued for 33 months, while consumer prices saw an unexpected rise in June.
"In contrast, Asian shares experienced a slight dip as investors opted to avoid taking risks in light of Trump intensifying trade tensions."
Munnelly added that treasuries declined for the fifth consecutive session as global demand for long-term government debt diminished amidst a series of bond auctions this week.
"Persistently weak inflation could pressure Chinese policymakers to enhance stimulus efforts to break a detrimental cycle of declining prices, profits, and wages.
"Investors are now closely watching Beijing's upcoming July Politburo meeting for more substantial support measures following recent government initiatives to address factory overcapacity.
"In other developments, traders are being cautious as they assess the potential impact of escalating trade tensions, seeking clues on the future direction of stocks after they hit record highs last week."
Markets mixed on China inflation data, global trade developments
Japan's Nikkei 225 rose 0.33% to 39,821.28, supported by gains in Sumitomo Dainippon Pharma, which climbed 7.72%, Omron, up 6.65%, and Nissan Chemical Industries, which added 6.01%.
The Topix index advanced 0.41% to 2,828.16.
Mainland Chinese markets edged lower after a session of gains.
The Shanghai Composite slipped 0.13% to 3,493.05, while the Shenzhen Component fell 0.06% to 10,581.80.
Among the biggest losers were Nanjing Textiles Import & Export, down 7.23%, Zhejiang Chengbang Landscape, down 6.67%, and Jiangsu Lianhuan Pharmaceutical, down 5.35%.
The Hang Seng Index in Hong Kong fell 1.06% to 10,581.80.
Henderson Land dropped 8.64%, Alibaba Group declined 3.83%, and Zijin Mining Group lost 3.38%.
South Korea's Kospi 100 rose 0.06% to 3,150.55, lifted by a 20.96% surge in Lotte Corporation.
LIG Nex1 gained 8.59%, and SK Holdings added 7.18%.
In Australia, the S&P/ASX 200 declined 0.61% to 8,538.60.
Gold miners led losses in Sydney, with Evolution Mining down 7.02%, Resolute Mining off 6.57%, and Regis Resources falling 5.7%.
Across the Tasman Sea, New Zealand's S&P/NZX 50 slipped 0.7% to 12,768.61.
Investore Property dropped 4.13%, A2 Milk Company fell 4.06%, and Fletcher Building declined 3.54%.
In currency markets, the dollar was last up 0.01% on the yen to trade at JPY 146.60.
It slipped 0.05% against the Aussie to AUD 1.5306, and fell 0.03% on the Kiwi, changing hands at NZD 1.6667.
Oil prices rose, with Brent crude futures last up 0.6% on ICE at $70.57 per barrel, while the NYMEX quote for West Texas Intermediate added 0.66% to $68.78.
RBNZ holds interest rates, consumer inflation rises in China
The Reserve Bank of New Zealand (RBNZ) held its official cash rate (OCR) steady at 3.25% on Wednesday, as expected.
While no vote was required, the Monetary Policy Committee remained divided, with the latest statement indicating a likely rate cut at the next monetary policy statement in August - provided upcoming data aligned with expectations.
The RBNZ signalled that trends in core inflation and inflation expectations over the next six weeks would be crucial in determining the path forward.
Analysts at Westpac were still forecasting a final 25 basis point cut in August.
In China, consumer prices rose for the first time in five months in June, although inflation remained subdued.
The consumer price index increased 0.1% year-on-year, ending a four-month deflationary streak and surprising economists who had anticipated another 0.1% decline.
Food prices fell 0.3% while non-food prices edged up 0.1%, and core inflation, which excludes food and energy, rose to 0.7%.
On a monthly basis, prices fell 0.1%, contrary to expectations for no change.
Producer prices continued their prolonged slump, however, with China's producer price index falling 3.6% in June from a year earlier.
That marked the 33rd consecutive monthly decline and the sharpest drop since July 2023.
The weak inflation data would likely intensify pressure on Beijing to implement further measures to support domestic demand and stabilise economic momentum.
Reporting by Josh White for Sharecast.com.
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