Nikkei Edges Up Amid Global Market Uncertainty

Japanese equities edged up as global markets await Nvidia earnings. Tech slump and Wall Street cues undercut Asian stock markets. Mitsubishi Corporation and other companies are withdrawing from offshore wind farm construction projects. Nikkei ends at over 2-week low as yen gains after Trump fires Fed's Cook.

Japanese equities experienced a modest uptick on Tuesday, July 2, 2025, as global markets braced for Nvidia's earnings report. The tech slump and cues from Wall Street undercut Asian stock markets, while Mitsubishi Corporation and other companies announced their withdrawal from offshore wind farm construction projects. The Nikkei index ended at a two-week low as the yen gained strength following President Trump's firing of Federal Reserve governor Lisa Cook.

The day began with mixed sentiments on Wall Street, where the US2000 index gained 0.5% despite the mixed economic data. Durable goods, the Conference Board Consumer Index, and the Richmond Fed all showed stronger-than-expected results. Meanwhile, shares of EchoStar (SATS.US) surged nearly 80% after announcing a business deal with AT&T, and Heico (HEI.US) jumped 8.5% following its earnings report, which showed robust growth in both revenue and earnings per share (EPS).

The focus shifted to Nvidia (NVDA.US), which is expected to report earnings after the market close on Wednesday. The company's stock has risen 34% year-to-date and was the top-performing Dow stock on Monday. Investors are cautiously optimistic about the results, given the company's strong performance and the potential impact of the earnings report on the tech sector.

The withdrawal of Mitsubishi Corporation and other companies from offshore wind farm projects in Japan's Chiba and Akita prefectures has raised concerns about the profitability of these projects. The total projected capacity of the three projects is 1.76 gigawatts (GW), scheduled for launch between 2028 and 2030. Japan aims to achieve future offshore wind farm capacity of 10 GW by 2030 and 45 GW by 2040. The industry ministry (METI) is considering revising guidelines to extend offshore wind project leases by 10 years, from the current 30 years, to help developers manage soaring construction costs.

The Nikkei index ended the day at a two-week low, driven by a stronger yen. The yen gained value following President Trump's decision to remove Federal Reserve governor Lisa Cook, who refused to step down amid allegations of mortgage fraud. The move has raised concerns over the independence of the Federal Reserve and its ability to maintain interest rates. Longer-dated US bond prices fell amid these concerns, with the yield on 10-year Treasurys falling to 4.26% and the 30-year Treasury yield rising to 4.9%.

In summary, Japanese equities edged up on Tuesday, July 2, 2025, as global markets awaited Nvidia's earnings report. The withdrawal of companies from offshore wind farm projects in Japan and the impact of President Trump's actions on the Federal Reserve and the yen contributed to the market dynamics.

References:
[1] https://www.xtb.com/cy/market-analysis/news-and-research/us-open-us100-slightly-gains-ahead-of-the-nvidia-report-heico-surges-8-5-after-earnings
[2] https://ca.finance.yahoo.com/news/stock-market-today-dow-sp-500-nasdaq-climb-with-trump-fed-fight-in-focus-nvidia-earnings-on-deck-200119510.html
[3] https://www.bairdmaritime.com/offshore/renewables/offshore-wind/mitsubishi-to-pull-out-of-three-offshore-wind-projects-in-japan