Japan’s economy expands more than expected in second quarter despite U.S. tariff headwinds
Japan’s economy expanded 0.3% in the second quarter of 2025, compared to the first three months of the year, as the country grappled with the volatile tariff policy out of the United States.
This was compared to the revised 0.1% growth seen in the first quarter, and was higher than the 0.1% increase expected by economists polled by Reuters.
On a year-over-year basis, Japan’s GDP expanded 1.2% in the second quarter, falling short of the first quarter’s 1.8% growth.
The GDP reading comes as Japan struggled to cope with an uncertain trade environment in the second quarter, with the country only reaching a trade deal with the U.S. on July 23.
The deal sees Japan face a 15% blanket tariff on all exports to the U.S., including automobiles.
Read the full story here.
—Lim Hui Jie
Australia, Japan markets open higher
Asia-Pacific markets opened higher Friday.
Japan’s Nikkei 225 benchmark rose 0.67%, while the broader Topix index added 0.99%, as of 8:08 a.m. Singapore time (8:08 p.m. ET Thursday).
Over in Australia, the S&P/ASX 200 benchmark climbed 0.12%.
South Korea markets were closed for the holidays.
— Lee Ying Shan
Here are the opening calls for the day
Happy Friday from Singapore. Asia markets are set for a mixed open.
Australia’s S&P/ASX 200 was set to start the day marginally lower with futures tied to the benchmark at 8,838, compared with the index’s last close of 8.873.8.
Japan’s Nikkei 225 was set to open higher, with the futures contract in Chicago at 42,795, while its counterpart in Osaka last traded at 42,770, against the index’s last close of 42,649.26.
Futures for Hong Kong’s Hang Seng index stood at 25,316, pointing to a weaker open compared with the HSI’s last close of 25,519.32.
South Korean markets were closed for a holiday.
— Lee Ying Shan
S&P 500 notches third record close in a row
The S&P 500 ticked higher on Thursday to eke out its third record close in a row.
The benchmark added 0.03%, closing at 6,468.54. The Nasdaq Composite slipped 0.01%, finishing at 21,710.67. The Dow Jones Industrial Average shed 11.01 points, or 0.02%, and settled at 44,911.26.
— Lisa Kailai Han
Economist Marc Sumerlin confirms he’s in the running for Fed chair
In a Thursday interview with CNBC, economist Marc Sumerlin confirmed that he’s in the running to be the next Federal Reserve chair.
“I got a call last Wednesday that said there was going to be a list [and] I was going to be on it. That’s as much as I know right now,” he said. “I’m waiting for more guidance on where we go from here.”
Sumerlin also voiced his support for a big interest rate cut. The former senior economist under then-President George W. Bush said that a 50 basis-point rate cut “seems like pretty much a no-brainer to me.”
One basis point equals 0.01%, so a 50 basis-point cut would be half a percentage point.
— Jeff Cox, Lisa Kailai Han
Investors should consider hedging against further market volatility, UBS says
Equities may have further upside from here, but investors should still be mindful of elevated volatility going forward, according to UBS.
“While the VIX index of implied stock volatility has fallen to the lowest level since December last year, market swings could pick up quickly if trade tensions escalate significantly, economic data weakens faster than expected, or if geopolitical risks worsen,” the bank wrote in a Wednesday note to clients. “Investors who are already allocated to equities in line with their strategic benchmarks should consider structured strategies with capital preservation features, while those underallocated should prepare to add exposure on potential market dips or consider a disciplined approach to phasing into stocks.”
UBS added that a “well-diversified portfolio” is suited for helping investors hedge against volatility while also setting them up for future gains.
— Lisa Kailai Han
AloJapan.com