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August 6, 2025 – 04:33

(Bloomberg) — Asian shares traded in a narrow range as weak US services data fueled uncertainty over the Federal Reserve’s policy path, while shares of chipmakers and pharmaceutical companies declined on tariff threats.

Japanese shares rose, led by carmakers, while South Korean stocks edged lower. The broader MSCI Asia Pacific Index was up 0.2%. Asian chip-related stocks and some pharmaceutical companies fell after President Donald Trump said he will announce tariffs on the sectors “within the next week or so.”

Oil rose after four consecutive days of declines while a gauge of the dollar was steady. US equity-index futures rose 0.2%.

Stocks are consolidating after their recently rally amid concerns over the Fed’s direction for rates and a slew of tariff headlines. Markets had jumped Monday on hopes for rate cuts after a soft jobs data, but latest economic indicators have since complicated the central bank’s balancing act between taming inflation and supporting growth.

“Caution is the default for Asian markets,” said Vishnu Varathan, head of macro research for Asia ex-Japan at Mizuho Bank Ltd. Weaker US economic data “has the silver-lining of latent Fed dovishness to provide rates relief. And there are some parts of markets that appreciate that.”

The US services sector effectively stagnated in July as firms — faced with tepid demand and rising costs — reduced headcount. The data, released Tuesday, painted a picture of a sluggish service economy wrestling with the fallout of higher tariffs, cautious consumers and uncertainty stemming from Trump’s policies.

Data out last week showed weaker-than-expected jobs data while inflation-adjusted consumer spending barely rose.

“Traders are continuing to speculate on the time of the Fed’s next rate cuts with sticky inflation signs weighed against weakening economic indicators,” said Fawad Razaqzada at City Index and Forex.com.

He also noted the S&P 500 outlook could start to deteriorate in the near-term amid warnings over sky-high valuations against a backdrop of weakening economy.

Asian chip-related stocks declined after a stream of negative news, including a Taiwanese probe into an alleged theft of Taiwan Semiconductor Manufacturing Co.’s trade secrets. Shares of the chipmaker fell 1.7% Wednesday.

Also, Advanced Micro Devices Inc. warned that its access to the crucial China market remains uncertain. Super Micro Computer Inc. tumbled after its results missed expectations.

In tariff news, Trump said he was “getting very close to a deal” with Beijing. Chinese shares were little changed.

Japanese stocks rose, led by carmakers on optimism that the country’s chief trade negotiator Ryosei Akazawa will be able to secure lower auto tariffs during his trip to the US this week.

“With Akazawa in the US, there’s hope of progress toward lower auto tariffs,” which is fueling gains in carmaker stocks, said Yutaka Miura, senior technical analyst at Mizuho Securities.

Trump also suggested he would impose increased tariffs on additional countries buying energy from Russia — including China — after saying earlier Tuesday that he would raise levies on Indian exports within 24 hours.

India is racing to contain the economic fallout from Trump’s threatened tariffs, which has left officials in New Delhi feeling shocked, jilted and unsure of how to respond. Indian shares and the currency fell Tuesday ahead of the central bank’s rate decision later Wednesday.

In other tariff news, Swiss President Karin Keller-Sutter arrived in Washington to make a last-minute bid for a deal to lower the 39% tariff imposed last week. The trip is to “facilitate meetings with the US authorities at short notice and hold talks,” the government said in a statement.

Corporate News:

Cathay Pacific Airways Ltd. is poised to place an order for new aircraft from Boeing Co. for the first time in 12 years. OpenAI is in early talks about a potential secondary sale of stock for current and former employees at a valuation of about $500 billion. Advanced Micro Devices Inc. said the chipmaker’s return to the crucial China market is difficult to predict, overshadowing a generally upbeat forecast for its AI business. Some of the main moves in markets:

Stocks

S&P 500 futures rose 0.2% as of 11:28 a.m. Tokyo time Japan’s Topix rose 1.1% Australia’s S&P/ASX 200 rose 0.6% Hong Kong’s Hang Seng fell 0.2% The Shanghai Composite was little changed Euro Stoxx 50 futures rose 0.2% Currencies

The Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1570 The Japanese yen was little changed at 147.61 per dollar The offshore yuan was little changed at 7.1927 per dollar Cryptocurrencies

Bitcoin was little changed at $113,677.48 Ether rose 0.2% to $3,584.34 Bonds

The yield on 10-year Treasuries was little changed at 4.22% Japan’s 10-year yield advanced one basis point to 1.475% Australia’s 10-year yield advanced one basis point to 4.24% Commodities

West Texas Intermediate crude rose 0.4% to $65.45 a barrel Spot gold fell 0.2% to $3,375 an ounce This story was produced with the assistance of Bloomberg Automation.

–With assistance from Toby Alder, Winnie Hsu and Alice French.

©2025 Bloomberg L.P.