HONG KONG (Nikkei Markets) -- Asian shares outside of Japan fell Friday with investors considering the prospects of monetary easing by the U.S. Federal Reserve and President Donald Trump's remarks on China. The Nikkei Asia300 Index of companies outside Japan declined 0.2% to close at 1,319.01.
The U.S. monetary policy outlook remained a major focus point for investors in Asia. Fed chair Jerome Powell, testifying before U.S. lawmakers for a second day on Thursday, signaled once again that the central bank was ready to cut interest rates amid uncertainties related to trade tensions and the weak global economy.
However, odds of a 50 basis-points rate cut by the Fed at the July 30-31 meeting declined after U.S. core inflation quickened more than expected. While the core inflation was higher-than-forecasts, the headline number was in line with estimates. The data did not affect the odds of a quarter percentage rate cut by the Fed at the July 30-31 meeting.
Meanwhile, Trump said on Twitter yesterday that China was "letting us down" by not buying agricultural products. Trump and Chinese President Xi Jinping at the G20 gathering last month had agreed to a temporary truce in the trade war and following that, the U.S. leader said Beijing had agreed to buy more agricultural products.
An index of Chinese companies listed in Hong Kong ended little changed. Lenders and insurers were the day's top performers, while mobile phone operators struggled. China Construction Bank added 0.6%, China Life Insurance climbed 1.8%, while China Telecom declined 2.1%.
Earlier Friday, China's customs data showed that exports by the region's largest economy declined by 1.3% in June in dollar terms from a year earlier and imports fell by 7.3%. Economists polled by Reuters had expected the exports to fall by 2% and imports to contract by 4.5%.
Lenovo Group jumped 4.4% after two research companies, International Data Corp. and Gartner, said sales of personal computers grew in the June quarter.
Singapore's FTSE Straits Times Index closed 0.2% higher, shrugging off an unexpected decline in sequential economic growth. Data released earlier Friday revealed that Singapore's GDP contracted by 3.4% on-quarter during the April-June period. Compared with a year ago, the economy rose 0.1% during the three months ended June, the slowest pace in a decade and well below the estimate of around 1.1% from economists polled by Reuters.
Following the data, ANZ Research said it expects the Monetary Authority of Singapore to ease the policy at their next meeting in October. ING Bank did not rule out the possibility of a move before that, saying "an imminent move looks probable."