Asian Stocks Drop Ahead of US Tariff Deadline, Central Bank Meetings

Asian stock markets, particularly in Japan, retreated from recent record highs as investors took profits ahead of a critical week marked by U.S. President Donald Trump's August 1 tariff deadline and several major central bank meetings, including the Federal Reserve and the Bank of Japan. Japan's Topix index, after surging over 5% to a record, slipped 0.7%, while the Nikkei fell 0.5%, amid political uncertainty following reports that Prime Minister Shigeru Ishiba plans to step down after his coalition lost its majority. The dollar strengthened against the yen, supported by strong U.S. economic data, while Japanese government bond yields hovered near their highest levels since 2008. In the U.S., investors anticipate a Federal Reserve interest rate decision, the release of monthly payroll data, and earnings reports from major tech companies such as Amazon, Apple, Meta, and Microsoft. The European Central Bank held rates steady, pausing its easing cycle as it assesses the impact of U.S. tariffs. Global markets remain cautious but optimistic about potential U.S. trade deals with the European Union and China following an agreement with Japan earlier this week.