Asian Equities Wobble Amid Trade Tensions and Economic Forecast Adjustments

Asian equities took a dive on Thursday, influenced by underwhelming Chinese activity data and a significant drop in copper prices. The yen, however, gained strength after the Bank of Japan maintained its inflation forecast and interest rates, hinting at a possible rate hike later this year as part of Japan's trade strategy with the U.S.

The yen appreciated sharply, marking a 0.6% rise to 148.62 per U.S. dollar, as Japan's central bank held its short-term interest rates. This decision did not notably impact Japanese shares, which saw a marginal increase. Concurrently, the markets processed a U.S.-South Korea trade agreement, a steady Federal Reserve rate decision, and strong tech earnings that propelled Nasdaq futures upward.

In a challenging market environment, stocks in Hong Kong and China led regional losses following economic activity reports. The Federal Reserve's cautious stance leaves room for potential rate cuts, balancing between economic data and inflation risks, against the backdrop of President Trump's aggressive trade policies and looming global market uncertainties.

(With inputs from agencies.)