(Sharecast News) - Asia-Pacific markets mostly advanced on Thursday as investors weighed mixed economic data from Japan and Australia alongside renewed political uncertainty over the future of US Federal Reserve chair Jerome Powell.
Trump denied plans to fire Powell overnight, but said "I don't rule out anything," raising questions over Fed leadership stability.
"Asia wakes up this morning to the smell of burnt policy paper and half-cooked credibility, as the Trump-Powell circus steals the overnight spotlight like a rogue firework at a festival," said Stephen Innes at SPI Asset Management.
"For traders rubbing the sleep out of their eyes in Tokyo, Singapore, and even here in Bangkok, the show has already gone halfway through its act - but the consequences will keep being debated, and perhaps even the screens will start showing some risk-off action.
"Midway through the US session, markets went into DEFCON 2 as CBS dropped the bomb: president Trump was reportedly preparing to replace Fed Chair Powell."
Innes said the market reactions were immediate, with the dollar selling, short-term Treasury yields dropping, and equities declining, although not sharply.
"Then, like a magician realizing the audience wasn't buying the trick, Trump stepped back from the ledge - sort of.
"Yes, he'd spoken about firing Powell, but no, he wasn't planning to actually do it. 'Highly unlikely,' he said, as if that's the kind of reassurance bond desks crave.
"The damage was partially reversed. Stocks dusted themselves off, the dollar crawled up from the floor, and yields found a tentative bid."
Most markets in the green after turbulent US session
Japan's Nikkei 225 rose 0.57% to close at 39,890.00, while the broader Topix gained 0.72% to 2,839.81.
The moves came despite a second straight monthly decline in Japanese exports and US president Donald Trump's reiteration that a 25% tariff on Japanese imports would remain in place.
In China, the Shanghai Composite added 0.37% to 3,516.83, and the Shenzhen Component climbed 1.43% to 10,873.62.
Gains were driven by sharp rallies in industrial and biotech names, with Liuzhou Iron & Steel, Jinyu Bio-Technology, and EGing Photovoltaic Technology all jumping over 10%.
South Korea's Kospi 100 edged up 0.09% to 3,222.20, supported by a 20.5% surge in Yuhan and gains in SK Biopharmaceuticals and Samsung Heavy Industries.
Australia's S&P/ASX 200 rose 0.90% to 8,639.00, even as unemployment reached a 43-month high.
EML Payments gained 6.48%, while Nuix and Auckland International Airport also posted solid advances.
New Zealand's S&P/NZX 50 climbed 1.18% to 12,905.41, buoyed by a 4.81% rise in A2 Milk Company and a 4.43% gain in Auckland International Airport.
Restaurant Brands New Zealand added 3.36%.
In contrast, Hong Kong's Hang Seng Index slipped 0.08% to 24,498.95, dragged down by losses in Chow Tai Fook Jewellery Group, Baidu, and New Oriental Education and Technology, which fell 3.55%, 3.33%, and 2.47%, respectively.
Currency markets reflected investor caution, with the dollar rising 0.53% on the yen to trade at JPY 148.67, as it gained 0.85% against the Aussie to AUD 1.5448, and was ahead 0.39% versus the Kiwi, changing hands at NZD 1.6880.
Oil prices were mixed, with Brent crude futures last down 0.03% on ICE at $68.49 per barrel, while the NYMEX quote for West Texas Intermediate inched up 0.09% to $66.44.
Japan exports decline in June, Australian unemployment rises
In economic news, Japan's exports declined by 0.5% year-on-year in June, missing expectations of a 0.5% increase and extending the 1.7% fall recorded in May.
The weak performance was driven by a sharp drop in shipments to major trading partners, with exports to China down 4.7% and exports to the United States falling 11.4%, deepening from an 11% drop in May.
The data came amid ongoing uncertainty surrounding trade talks with the U.S.
In Australia, the unemployment rate rose to 4.3% in June on a seasonally adjusted basis, above the 4.1% forecast by economists and marking the highest level since November 2021, according to LSEG data.
Net employment rose by just 2,000, falling short of expectations for a 20,000 increase and following a revised decline of 1,100 in May, according to figures from the Australian Bureau of Statistics.
By contrast, Singapore's non-oil domestic exports surged 13% in June compared to the same month a year earlier, beating forecasts for a 5% increase and reversing a 3.9% drop in May.
The strong rebound was driven by higher exports of electronic products, non-monetary gold and specialized machinery.
On a month-on-month basis, exports rose 14.3%, following a 12% decline in May.
The latest figures marked the sharpest annual growth since July 2024, according to LSEG.
Reporting by Josh White for Sharecast.com.
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