Asian shares mostly finish higher although worries continue over Trump's tariffs

TOKYO -- Asian shares were mostly higher in Tuesday trading, despite lingering worries about President Donald Trump’s latest updates to his tariffs that weighed on investor sentiments.

Japan's benchmark Nikkei 225 rose 0.6% to finish at 39,678.02. Australia's S&P/ASX 200 added 0.7% to 8,630.30. South Korea's Kospi edged up 0.4% to 3,215.28. Hong Kong's Hang Seng rose 0.9% to 24,423.87, while the Shanghai Composite dipped 0.4% to 3,505.00, after the Chinese government reported that growth slowed in the last quarter as Trump’s trade war escalated.

Tuesday's data showed the economy expanded at a robust 5.2% annual pace, compared with 5.4% annual growth in January-March. In quarterly terms, the world’s second-largest economy expanded by 1.1%, according to government data.

Despite worries about the damage Trump's tariffs may have on the region's exporters, speculation continues that he may ultimately back down on them. They don't take effect until Aug. 1, which leaves time for more negotiations.

On Wall Street Monday, the S&P 500 edged up by 0.1%, the Dow Jones Industrial Average added 0.2% and the Nasdaq composite rose 0.3%.

A nationwide election for the upper house of Japan's Parliament, set for Sunday, also added to the wait-and-see attitude among market players. Analysts say the ruling pro-business Liberal Democratic Party may face an uphill battle and will likely need coalition partners, including possibly new ones, to keep its grip on power.

If Trump were to enact all his proposed tariffs on Aug. 1, they would raise the risk of a recession. That would not only hurt American consumers but also raise the pressure on the U.S. government’s debt level relative to the economy’s size, particularly after Washington approved big tax cuts that will add to the deficit.

“We therefore believe that the administration is using this latest round of tariff escalation to maximize its negotiating leverage and that it will ultimately de-escalate, especially if there is a new bout of heightened bond and stock market volatility,” according to Ulrike Hoffmann-Burchardi, global head of equities at UBS Global Wealth Management.

“As usual, there are many conditions and clauses that can get these rates reduced,” said Brian Jacobsen, chief economist at Annex Wealth Management. “That’s probably why the market might not like the tariff talk, but it’s not panicking about it either.”

For the time being, the uncertainty around tariffs could help keep markets unsteady. This upcoming week has several potential flashpoints that could shake things up.

The latest reading on inflation across the U.S. comes Tuesday, with economists expecting it to show inflation accelerated to 2.6% last month from 2.4% in May.

Companies are also lining up to report how they performed during the spring. JPMorgan Chase and several other huge banks will report their latest quarterly results Tuesday, followed by Johnson & Johnson on Wednesday and PepsiCo on Thursday.

Fastenal, a distributor of industrial and construction supplies, reported Monday a stronger profit for the latest quarter than analysts expected. Its stock rose 2.9%, though it also said that market conditions remain sluggish.

Shares of Kenvue rose 2.3% in shaky trading after the former division of Johnson & Johnson said CEO Thibaut Mongon is stepping down. Kenvue, the maker of Listerine and Band-Aid brands, is in the midst of a strategic review of its options, “including ways to simplify the company’s portfolio and how it operates,” according to board chair Larry Merlo.

Some of the biggest moves in financial markets were for crypto, where bitcoin continues to set records. This upcoming week is Crypto Week in Washington, where Congress will consider several bills to “make America the crypto capital of the world.”

In energy trading, benchmark U.S. crude fell 50 cents to $66.48 a barrel. Brent crude, the international standard, declined 41 cents to $68.80 a barrel.

In currency trading, the U.S. dollar inched up to 147.73 Japanese yen from 147.72 yen. The euro cost $1.1677, up from $1.1666.

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AP Business Writer Stan Choe contributed to this report.