Asian shares react as inflation updates lead to mixed trading

On July 16, 2025, Asian shares exhibited a mixed performance in the wake of an inflation update that had a noteworthy impact on U.S. stock markets. Specifically, while most U.S. stocks engaged in a downturn, the tech giant Nvidia achieved significant gains that drove the Nasdaq to reach another record high. In Japan, the Nikkei 225 index saw an increase of 0.6%, closing at 39,895.84, attributed to the rising U.S. dollar against the Japanese yen, which traded near 149 yen. Investors are particularly attentive to the upcoming elections for the Upper House of Parliament, which are expected to result in tax cuts and elevated government spending as lawmakers attempt to improve the decreasing popularity of the ruling Liberal Democrats. Meanwhile, other regions in Asia displayed varying results, with Hong Kong's Hang Seng index rising by 0.3% to 24,658.55, while the Shanghai Composite index fell by 0.1% to 3,500.62. In South Korea, the Kospi index declined by 0.7% to 3,192.97, and Australia's S&P/ASX 200 dropped by 0.8% to 8,558.10. Additionally, Taiwan's Taiex recorded a 0.8% increase, while India’s Sensex experienced a slight decline of 0.1%. In Jakarta, the stock market moved upward by 0.7% following U.S. President Donald Trump's announcement of plans to impose tariffs on imports from Indonesia, predicting a rate of 19%, while American goods shipped to the region would face no tariffs. In the U.S. market, the Dow Jones Industrial Average fell by 1%, settling at 44,023.29, driven down by a 5.5% decline in Wells Fargo's shares after the bank adjusted its earnings forecast. Analysts suggest that rising prices may be a direct consequence of the tariffs proposed by President Trump against other countries. In response to the fluctuating economic conditions, the yield on the 10-year Treasury note climbed to 4.48%, up from 4.43%, and the two-year Treasury yield rose to 3.95% from 3.90%. Investors are largely anticipating a potential reduction in the Federal Reserve's main interest rates by the year's end, motivated by the recent inflation report. Lastly, Brent crude prices saw an uptick of 15 cents, closing at $68.86 per barrel, while the U.S. dollar strengthened against the Japanese yen and the euro also experienced slight gains compared to previous figures.