Asian shares and the yen remained stable on Monday despite political setbacks in Japan and continued global uncertainty. The market reaction to Japan’s upper house election, where Prime Minister Shigeru Ishiba’s coalition lost its majority, was muted, with the yen firming slightly to 148.29 per dollar and Nikkei futures steady at 39,820, mirroring Friday’s close.
Investors are also watching for progress in trade negotiations ahead of U.S. President Donald Trump’s August 1 tariff deadline. While a U.S.–China meeting may not happen until October, European Commission President Ursula von der Leyen is expected to meet Chinese President Xi Jinping this week. Hopes for easing tensions lifted Chinese blue chips by 0.3%, while South Korean stocks gained 0.5%.
Wall Street futures edged higher ahead of key earnings reports from Alphabet, Tesla, and IBM. The S&P 500 aerospace and defense sector has already climbed 30% this year, driven by increased global defense spending. S&P 500 and Nasdaq futures both rose 0.1%, hovering near record highs.
In the bond market, U.S. Treasury futures held steady as investors await clearer signals on Federal Reserve policy. While rate cuts are expected later in the year, Fed Chair Jerome Powell’s cautious stance has tempered expectations for July. Meanwhile, the European Central Bank is set to hold rates at 2.0% this week.
Commodities were mostly stable, with gold at $3,348 an ounce and oil prices inching higher. Brent crude rose 0.1% to $69.36 per barrel, while U.S. crude gained 0.2% to $67.45, as markets weighed supply concerns against potential sanctions on Russian exports.
