Asian equities declined on Tuesday while the U.S. dollar continued its downward trajectory, heading for a fifth consecutive monthly loss. The market's mood remained cautious despite a temporary boost in U.S. futures after President Donald Trump delayed his plan to impose 50% tariffs on European Union goods, shifting the deadline to July 9.

Asian Markets Dip Amid Uncertainty

Market sentiment in Asia remained subdued:

MSCI’s broad index of Asia-Pacific shares outside Japan slipped 0.17%.

Japan’s Nikkei dropped 0.15%.

Hong Kong’s Hang Seng fell 0.1%.

Mainland China markets were flat, with the CSI300 down 0.06% and the Shanghai Composite barely moving.

A U.S. market holiday kept overnight trading thin, but Trump's reversal injected optimism into Wall Street futures. Nasdaq contracts climbed 1.26% in Asian hours, S&P 500 futures rose 1.11%, and FTSE futures advanced 0.94%.

Market Watch: Nvidia Earnings & Month-End Flows

Investors are closely watching Nvidia’s upcoming earnings, expected to report a 65.9% surge in Q1 revenue, reinforcing the ongoing AI investment boom. Meanwhile, month-end rebalancing flows are anticipated to influence price movements this week.

Global Economic Signals and Central Bank Insights

In Japan, super-long government bond yields retreated from last week's highs. Meanwhile, global monetary policymakers have gathered in Tokyo for the Bank of Japan’s annual conference to address inflation and economic growth trends. Upcoming speeches from U.S. Federal Reserve officials and Friday’s core PCE price index are also on investors’ radars.

Dollar Wavers as Confidence Erodes

The dollar showed continued weakness:

Headed for its fifth straight monthly decline—its longest losing streak since 2017.

Euro hovered near a one-month high at $1.14035.

Japanese yen strengthened 0.5% to ¥142.18 per dollar.

Analysts cite unpredictable U.S. trade policy, ballooning deficits, and mounting external debt as factors eroding trust in the dollar. “We may be witnessing the beginning of a regime shift,” noted David Meier of Julius Baer.

Commodities Edge Lower

As investor sentiment shifts:

Gold dipped 0.28% to $3,332.91 per ounce.

Brent crude eased 0.1% to $64.67 per barrel.

U.S. WTI fell 0.16% to $61.43 per barrel, ahead of the upcoming OPEC+ meeting.