Japan gains on BOJ news, but other Asian markets fall on concerns over China's trade

On Friday, the majority of Asian equities declined as a rally fueled by indications of slowing U.S. inflation faded, while Japanese stocks surged after the Bank of Japan shocked investors by indicating that there would be no immediate adjustments to its bond-buying programme.

Due to further levies imposed by the European Union on China's leading manufacturers of electric vehicles, the Chinese markets had the worst day overall. Sentiment was also depressed by fears of Beijing taking punitive action.

Wall Street provided mediocre guidance to regional markets. The S&P 500 and NASDAQ Composite reached record highs for a fourth straight day on to advances in technology stocks, while wider sectors were muted by unexpectedly low manufacturing inflation data in May.

As anticipated, the BOJ maintained stable interest rates. However, the bank shocked investors by not making any immediate adjustments to its bond-purchasing plan.

As an alternative, the BOJ announced that at its upcoming meeting at the end of July, it will convene with market players and present a detailed strategy to start reducing bond purchases.

The action suggested that Japan's monetary policy will continue to be relatively loose in the foreseeable future, which is encouraging for regional stock markets.

Following the EU's announcement of hefty tariffs ranging from 17% to 30% on the import of Chinese electric vehicles, the Chinese stock market saw prolonged selling.

After the US, the EU also imposed levies on China's rapidly expanding electric vehicle market. However, the EU is a sizable market for Chinese EV manufacturers, in contrast to the US.

The tariffs increased worries that Beijing may announce retaliation measures and that the EU and the US would place more restrictions on Chinese imports, severing ties between the two biggest economies in the world.

The economic calendar is fairly quiet for the day apart from some ECB speakers in the mid-morning and Fed speakers in the afternoon.

(Sources: investing.com, reuters.com)