Markets Today: Japans Nominal Wage Hits Four-Month High, European Shares Advance, DAX Back at Crucial 24000 Level

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Asia Market Wrap - Japan Wages Hit Four-Month High

Asian stocks went up as Japanese carmakers gained hope that the country might secure lower auto tariffs in talks with the US.

The MSCI Asia-Pacific index (excluding Japan) fell slightly by 0.1%, while Japan's Nikkei rose 0.6%. Australia's resource-focused stocks gained 0.8%. Meanwhile, China's blue-chip stocks and Hong Kong's Hang Seng index both edged up by 0.1%.

Japan’s top trade negotiator, Ryosei Akazawa, is heading to Washington to push the US to follow through on its promise to lower car tariffs from last month’s trade deal. Tariff news is making headlines again, with Trump saying a deal with China is “very close,” while India prepares for the impact of Trump’s tariff threats.

Most Read: Nikkei 225 Technical: Start of new bullish impulsive up move as Japan’s wages tick higher

Asian chip stocks dropped after bad news, including a Taiwanese investigation into alleged theft of trade secrets from Taiwan Semiconductor Manufacturing Co., whose shares fell 1.7% on Wednesday. Advanced Micro Devices Inc. also warned about uncertainty in accessing the Chinese market, and Super Micro Computer Inc. saw its shares tumble after disappointing results.

Trump also hinted at higher tariffs on countries buying energy from Russia, including China, and announced plans to raise tariffs on Indian exports within 24 hours. India is scrambling to manage the economic impact of these threats, leaving officials in New Delhi uncertain about how to respond.

Japan Wage Growth Hits Four-Month High

Japan's nominal wages grew 2.5% in June 2024, the fastest in four months but below the expected 3.2%. However, real wages, which account for inflation, fell 1.3%, marking the sixth straight month of decline as inflation outpaced pay increases.

While major companies agreed to over 5% wage hikes this spring, the full impact may not show until summer, as smaller firms implement raises more slowly. Meanwhile, a labor ministry panel proposed a 6% minimum wage hike, the biggest since 2002.

European Open - Third Straight Day of Gains

European stocks continued to rise on Wednesday as investors took advantage of recent market dips, ignoring new U.S. tariff threats and mixed corporate earnings.

The STOXX 600 index gained 0.3% by 0713 GMT, marking its third straight day of gains after hitting a five-week low on Friday. Germany's DAX rose 0.5%, and France's CAC 40 climbed 0.4%.

Commerzbank shares went up nearly 1% after reporting better-than-expected quarterly profits and improving its full-year outlook. Siemens Energy shares also rose 1.2% after saying it expects to meet the high end of its 2025 growth targets.

However, European healthcare stocks fell 0.7%, dragged down by a 1.3% drop in Novo Nordisk shares. The Danish drugmaker, known for Wegovy, kept its full-year outlook unchanged after cutting its 2025 sales forecast last week, which wiped out nearly $95 billion in market value. The company now plans to reduce costs.

On the FX front, the dollar index (DXY) rose 0.1% to 98.785 against a basket of currencies, still below Friday's high of 100.25 before the jobs report. It was also up 0.1% against the yen at 147.78, while the euro stayed flat at $1.1577. The British pound dipped 0.1% to $1.329. Meanwhile, the Australian and New Zealand dollars both gained 0.3%, reaching $0.64895 and $0.59181, respectively.

Currency Power Balance

Source: OANDA Labs

Gold prices remain choppy with some losses overnight for the precious metal. However with interest rate expectations losses are likely to remain limited.

For a full and comprehensive analysis on Gold, read Gold's (XAU/USD) Whipsaw Price Action a Sign that Bulls are Back at the Table. $3400/oz Up Next?

Oil prices rose on Wednesday, bouncing back from a five-week low, due to worries about supply disruptions after U.S. President Trump threatened tariffs on India over its Russian oil purchases.

Brent crude went up 48 cents (0.7%) to $68.12 a barrel, while U.S. West Texas Intermediate crude increased by 43 cents (0.7%) to $65.59 a barrel.

Economic Data Releases and Final Thoughts

Looking at the economic calendar, it is a quiet day ahead with US earnings the biggest events of the day.

Beyond that we have some Fed speakers later in the day. This may shake markets depending on the rhetoric as markets may want to hear more from policymakers following last weeks jobs data.

For all market-moving economic releases and events, see the MarketPulse Economic Calendar. (click to enlarge)

Chart of the Day - DAX Index

From a technical standpoint, the DAX index has seen a shift in character with a lower low being printed at the backend of last week.

This week has the index on a three-day run of gains but the index does appear vulnerable as it retests the 24000 handle.

A daily candle close above the swing high at 24313 will lead to a shift in momentum in favor of bulls again.

Until then bears appear to have the upper hand. Keep an eye on the period-14 RSI which is approaching the 50 level. A rejection may be a sign that bearish momentum is set to continue while a break above could be a sign that momentum is shifting in favor of bulls.

Immediate resistance rests at 24000 before the 24140 and 24313 handles come into focus.

A move lower here needs to navigate its way below the 23471 handle before the 100-day MA at 24318 comes into focus.

DAX Daily Chart, August 6. 2025

Source: TradingView.com (click to enlarge)

Client Sentiment Data - DAX Index

Looking at OANDA client sentiment data and market participants are short on the DAX Index with 71% of traders net-short. I prefer to take a contrarian view toward crowd sentiment and thus the fact that so many traders are short means the DAX Index could rise in the near-term.

Follow Zain on Twitter/X for Additional Market News and Insights @zvawda

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