On June 25, Asian stock markets rose, partially recovering recent losses, as investors focused on the US-China trade tensions and upcoming inflation data.

This week, attention is primarily on the upcoming Personal Consumption Expenditures (PCE) price index data, expected to influence US interest rate forecasts. Expectations of inflation kept overall Asian markets cautious, with weakness in tech stocks limiting broader market gains.

The Chinese markets remained relatively stable amid trade tensions, with the Shanghai and Shenzhen 300 indices up 0.1%, and the Shanghai Composite up 0.1%, while Hong Kong's Hang Seng Index surged over 1%. These indices had suffered significant losses in previous trading days, following Chinese officials' threats of a trade war with the EU over additional import tariffs on Chinese electric vehicles.

Reports suggested Chinese ministers discussed with German officials the possibility of reducing or even canceling tariffs planned for implementation in July. However, Canada has joined the US and EU in imposing additional tariffs on Chinese electric vehicles, potentially exacerbating already strained relations between China and the West.

Recent concerns about China significantly influenced sentiment in Asian markets, particularly if tensions escalate with other major countries. Reports indicated the Biden administration is investigating potential security issues involving major Chinese telecom companies, further affecting public perception of China.

Japan's Nikkei 225 index rose 0.5%, though declines in heavyweight tech stocks kept trading within a narrow range. Meanwhile, the broader TOPIX index climbed 1.4%, lifted by gains in economically sensitive stocks.

Focus in Japan this week centers on the upcoming Tokyo Consumer Price Index data, scheduled for release on June 28. Recent minutes from the Bank of Japan's meeting indicated speculation among members about a possible rate hike in July. Concerns over a weakened yen potentially prompting government intervention have also kept market sentiment toward Japan tense.

In other Asian markets, Australia's ASX 200 index rose 0.9%, boosted by gains in mining company stocks. South Korea's KOSPI index increased by 0.4%, tempered by declines in tech stocks preventing larger gains. Futures for India's Nifty 50 index indicated a flat opening, as the index continues to face resistance near recent record highs.