Asian equity markets remained largely stable on Wednesday, as investors exercised caution following trade talks between the United States and China that ended without any major breakthroughs.

The MSCI Asia-Pacific Index rose by 0.3%, led by gains in Taiwan, while U.S. equities closed slightly lower.

Japan’s Nikkei index slipped by 0.03%, and Hong Kong’s Hang Seng fell 0.4%. Meanwhile, the euro rebounded from a one-month low, gaining 0.2% to reach $1.1564, after the European Union secured a trade deal with the U.S. administration.

Traders are preparing for a wave of central bank announcements, key economic data releases, and corporate earnings reports in the coming days — all culminating in the August 1st tariff implementation deadline, dubbed “Liberation Day” by President Donald Trump.


Fed Expected to Hold Rates Steady Amid Division

The U.S. Federal Reserve is widely expected to leave its benchmark interest rate unchanged at the conclusion of its Wednesday meeting. However, a few policymakers may dissent, calling for lower borrowing costs amid rising global uncertainty.


U.S. Treasury Yields Fall Ahead of Fed Decision

A strong auction of seven-year bonds eased concerns over demand for government debt, pushing the benchmark 10-year yield down to 4.328%, its lowest level since July 3, while the two-year yield held steady at 3.873%.


All Eyes on Bank of Japan

Investors are also watching the Bank of Japan, which is expected to keep its base rate unchanged on Thursday. Analysts will closely study the bank’s statement for clues on whether recent trade deals with the U.S. could pave the way for tighter monetary policy.

As the August 1st deadline approaches, trade talks with several nations have entered the final stretch, with diplomats warning that time is running out to prevent new import tariffs from the U.S.

On Tuesday, U.S. and Chinese officials said they would work to extend a 90-day tariff truce, though no major breakthroughs were announced. Both sides await political approval before moving forward.

U.S. officials noted that President Trump must decide whether to extend the truce, which expires on August 12, or let tariffs return to triple-digit levels — the final decision rests with the White House.


India and South Korea Scramble Ahead of Deadline

India is also bracing for higher U.S. tariffs, expected to range from 20% to 25% on certain export goods. Local officials have suspended new trade offers ahead of the August 1 supply cutoff, according to two unnamed government sources.

In a last-ditch effort to avoid the new duties, three South Korean ministers traveled to Washington for talks with Commerce Secretary Lutnick — officials described it as a desperate bid to secure concessions.


Oil Prices Surge on Supply Fears

Energy markets saw a sharp rise in oil prices due to concerns over future supply disruptions, after President Trump imposed a strict deadline on Russia to end its military actions in Ukraine. Brent crude for September delivery rose by 14 cents, or 0.19%, to settle at $72.65 per barrel.


Tech Earnings in Focus

Markets are also turning their attention to U.S. tech giants, with Microsoft and Meta set to report earnings on Wednesday. Analysts say these results could shape market sentiment for the remainder of the earnings season following a relatively strong start to quarterly updates.

Meanwhile, the Singapore dollar strengthened by 0.2% after the Monetary Authority of Singapore left its policy unchanged.

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