Asian Markets Slump as U.S. Tariff Deadline Looms; Japanese Shares Drop on Trump's Trade Remarks

Asian equities faced broad declines on Wednesday, weighed down by growing concerns over impending U.S. trade actions. The market downturn intensified after U.S. President Donald Trump signaled no plans to extend the current tariff truce set to expire on July 9. Japanese markets bore the brunt of the selloff, with the Nikkei 225 (NKY:IND) slipping 0.23% to 39,500 and the Topix Index dropping 0.6% to 2,814, marking consecutive sessions of losses. The yen weakened to 144 against the dollar, retreating from recent highs, as Trump threatened 35% tariffs on Japanese imports to force trade concessions.

Chinese markets showed modest declines, with the Shanghai Composite (SHCOMP) edging down 0.04% to 3,450 and the Shenzhen Component falling 0.5% to 10,420. Investors remained cautious amid President Xi Jinping's pledge to curb aggressive price competition and ongoing deflation concerns. Hong Kong's Hang Seng (HSI) bucked the trend, rising 0.68% to 24,202 after reopening from holidays.

Australian shares (AS51) gained 0.74% to 8,554, supported by mining and property stocks, despite disappointing manufacturing and retail data. The Aussie dollar weakened to $0.656 as economic indicators pointed to continued contraction. Meanwhile, Indian markets (SENSEX) dipped 0.05% to 83,676 as traders monitored U.S.-India trade negotiations and Middle East developments.

Globally, investors awaited key U.S. employment data later in the week for insights into Federal Reserve policy direction. U.S. stock futures showed modest gains early Wednesday following the Senate's passage of Trump's budget bill.