June 5, Asian stock markets exhibited varying trends as investors remained cautious while awaiting new interest rate cues. Meanwhile, the Japanese market plunged sharply amid concerns of monetary policy tightening sparked by robust wage data.

Asian markets received some support after moderate gains on Wall Street following poor overnight economic data in the United States, leading to market predictions that the Federal Reserve may lower interest rates in the future.

During the Asian trading session, U.S. stock index futures edged up slightly, but this week's non-farm payroll data remained the focus of the market.

Japanese stocks fall due to salary increase

Wage data showed a significant increase in average cash earnings in Japan for April, far exceeding expectations. As a result, the Nikkei 225 index fell by 0.8%, and the TOPIX index dropped by 1.2%.

With the wage growth agreement reached earlier by Japanese unions coming into effect, overall employee wages increased. The stronger wage growth aligns with the Bank of Japan's expectations for inflation levels in the coming months, expected to provide greater impetus for the bank's tightening policies.

As a result, the Bank of Japan plans to begin reducing its stimulus bond purchases at its meeting next week. However, the tightening of monetary conditions in Japan poses greater obstacles to the domestic stock market.

Other parts of the Japanese economy showed signs of weakness. According to the Purchasing Managers' Index, service sector growth in May was lower than expected.

Despite slower-than-expected GDP growth in the first quarter in Australia, dragged down by inflation and rising interest rates, the Australian ASX 200 index rose by 0.4%.

However, this outcome has raised concerns in the market about economic weakness, which may not leave sufficient room for the Reserve Bank of Australia to further raise interest rates.

Nevertheless, Reserve Bank of Australia Governor Michelle Bullock warned that stubborn inflation could lead to further rate hikes this year.

Indian stocks may continue declining

Indian Nifty 50 index futures pointed to a low opening on Tuesday after both the Nifty index and the BSE Sensex 30 index fell nearly 6%.

Preliminary vote counts showed a significant decrease in seats won by the ruling party in the Indian lower house of parliament, while the opposition Indian National Congress party saw gains. This result was confirmed after the market close, contrary to the market's prediction of a major victory for the Bharatiya Janata Party.

Other Asian stock markets showed different trends. Technology stocks boosted around 1% gains in the South Korean KOSPI index and the Hong Kong Hang Seng index, as some heavyweight technology companies saw buying interest amid a decline in U.S. Treasury yields.

The Chinese stock market performed poorly, with the Shanghai Shenzhen 300 index and the Shanghai Composite index falling by less than 0.2% from the flat line, as stronger-than-expected Purchasing Managers' Index data failed to lift market sentiment.