Updates with turnaround in Japan shares

Investing.com-- Most Asian stocks moved in a flat-to-low range on Tuesday as investors remained on edge over more U.S. trade tariffs, while Japanese markets recovered from early losses as weakness in the yen offset chatter over more interest rate hikes by the Bank of Japan.

Regional markets received scant trading cues from Wall Street, which was closed on Monday for the Memorial Day holiday. But U.S. stock index futures rose sharply in Asian trade, as investors cheered President Donald Trump’s delaying of steep trade tariffs on the European Union.

S&P 500 Futures jumped 0.9%, with some risk-on sentiment also spilling over into Asian markets ahead of the European open.

Focus this week, especially in the technology sector, was also on upcoming earnings from artificial intelligence major NVIDIA Corporation (NASDAQ:NVDA), which are due on Wednesday.

Japan shares recover as improving risk dents yen; Ueda talks rate hikes

Japan’s Nikkei 225 rose 0.5%, while the TOPIX added 0.4% by the market close. Both indexes reversed initial losses and were headed for a stronger close.

Gains were biased towards export-oriented sectors, which benefited from some weakening in the yen after Reuters reported that the Japanese government was considering trimming some long-term bond issuances, amid recent turmoil in sovereign debt markets.

The yen was also under some pressure from improving risk appetite, after Trump’s tariff delay.

Still, the Japanese currency had firmed earlier on Tuesday, while stocks had fallen after BOJ Governor Ueda flagged risks from high underlying inflation, and warned that the central bank will raise interest rates further if the Japanese economy improves.

Ueda said that if upcoming economic readings continue to signal strength, the BOJ will further scale back monetary easing. He also said that Japanese inflation was the closest it has been to the BOJ’s 2% annual target in 30 years.

Ueda’s comments come after data last week showed a bigger-than-expected pickup in Japanese consumer inflation, as private spending was supported by strong springtime wage hikes.

But Japan’s economy shrank in the first quarter of 2025, amid growing concerns over the impact of U.S. trade tariffs on local businesses, especially automakers.

Asia stocks muted amid tariff caution

Broader Asian markets moved in a flat-to-low range on Tuesday, as investors remained on edge over more U.S. trade tariffs. While Trump did postpone his proposed EU tariffs, he did not address his threat to tariff smartphone imports to the U.S., which could bode poorly for several Asian tech majors.

South Korea’s KOSPI was among the worst performers in Asia on Tuesday, down 0.5% as chipmakers Samsung Electronics Co Ltd (KS:005930) and SK Hynix Inc (KS:000660) retreated. Samsung could also be subject to U.S. import duties on smartphones.

Trump’s smartphone tariff threat was aimed primarily at Apple Inc (NASDAQ:AAPL), which sent shares of the company’s Asian suppliers lower this week. Hong Kong and China-listed AAC Technologies (OTC:AACAY) (HK:2018) and Luxshare Precision Industry Co Ltd (SZ:002475) lost nearly 2% each. Xiaomi Corp (HK:1810) lost 0.7% before its quarterly earnings due later in the day.

The Hang Seng index added 0.2%, while the mainland Shanghai Shenzhen CSI 300 and Shanghai Composite indexes fell 0.4% and 0.1%, respectively.

Taiwan’s TSMC (TW:2330) fell 1%, while Hon Hai Precision Industry Co Ltd (TW:2317) rose 0.3%.

HK-listed shares of JD.com (HK:9618) fell sharply after rival Meituan’s (HK:3690) CEO Wang Xing flagged heightened competition in China’s instant retail market.

Singapore’s Straits Times index was flat, while Australia’s ASX 200 rose 0.5%, buoyed by some strength in financials.

BHP Group Ltd (ASX:BHP) fell 0.1% after rising as much as 1.5%. A report said the world’s largest miner was in talks to sell some of its Brazilian copper and gold assets to Nexa Group.

India’s Nifty 50 index fell 0.4%, facing some profit-taking after it surged above the 25,000 level on Monday.

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