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The premium that Chinese stocks command over their Hong Kong-traded peers has narrowed to a five-year low, suggesting that some investors may look to snap up onshore stocks that have become cheaper.

Stocks listed on mainland exchanges, known as A-shares, are now trading at a 27% premium to their counterparts across the border, according to the Hang Seng Stock Connect China AH Premium Index. The valuation gap often widened again when the premium dipped to below 30% in previous occasions.

The CSI 300 Index, a benchmark for onshore shares, has lagged the Hang Seng China Enterprises Index this year, set for the widest underperformance since 2003. While the HSCEI gauge entered a bull market earlier this week, the rebound on the mainland has been much more tepid as the market lacks policy catalysts to draw fresh money.

The dollar extended its decline versus major peers as worries over US tariffs increased after President Donald Trump said he would notify trading partners soon of unilateral levy rates.

Bloomberg’s gauge of the dollar slid as much as 0.3% on Thursday to touch its lowest level since July 2023 following the news, with the safe-haven yen and Swiss franc leading the advance against the greenback. The dollar was already under pressure from a weaker-than-expected US inflation print, which helped spur traders to fully price in two quarter-point Federal Reserve interest rate cuts this year.

“The weak US CPI reasserts the soggy dollar backdrop, while the Middle East headlines also failed to spur a bounce in the dollar, which reflects its waning status as a haven currency during geopolitical flare-ups,” said Alex Loo, macro strategist at TD Securities in Singapore.

US President Donald Trump’s tariffs threaten to batter Japan’s vital auto industry and derail the country’s long-standing efforts to engineer a sustainable economic recovery.

With the 25% US tariff now in place on cars and auto parts, Japan’s major automakers — including Toyota Motor Corp., Honda Motor Co., Mazda Motor Corp. and Subaru Corp. — are bracing for a collective hit of more than $19 billion this fiscal year alone. And it’s not just the household names feeling the pain.

Northwest of Tokyo in Gunma Prefecture, where Subaru operates its main factory, the effects are already being felt. With costs rising, Yoshiyuki Nakajima, president of Shoda Seisakusho Co. — a supplier to Subaru — warned that his firm will be forced to slash profit margins if the tariffs persist. Worst case, layoffs will be unavoidable. “We’ll have no choice,” he said.

President Donald Trump said he intended to send letters to trading partners in the next one to two weeks setting unilateral tariff rates, ahead of a July 9 deadline to reimpose higher duties on dozens of economies.

“We’re going to be sending letters out in about a week and a half, two weeks, to countries, telling them what the deal is,” Trump told reporters Wednesday at the John F. Kennedy Center for the Performing Arts in Washington where he was attending a performance.

“At a certain point, we’re just going to send letters out. And I think you understand that, saying this is the deal, you can take it or leave it,” he added.

Gold gained for a second day on increased tensions in the Middle East, with its haven status also supported by President Donald Trump’s comments that he will inform trading partners on tariff rates within two weeks.

Bullion rose as much as 0.6% to around $3,373 an ounce, extending a 1% gain from the earlier session when it was also boosted by a declining dollar. Buying interest increased after the US ordered some embassy staff to depart Baghdad and allowed military families to leave the Middle East, after Iran threatened to attack US bases if talks over its nuclear program fell through.

Separately, Trump said he intended to send letters to trading partners in the next one to two weeks setting unilateral tariff rates, ahead of a July 9 deadline to reimpose higher duties on dozens of economies. The president also said a trade framework with China has been completed, with levies between the two largest economies to be maintained at their current levels.

Asia-Pacific markets traded mixed as investors assessed U.S. President Donald Trump’s declaration that a trade deal with China was “done.”

Japan’s Nikkei 225 was down 0.10% while the broader Topix added 0.12%. South Korea’s Kospi climbed 0.34%, and the small-cap Kosdaq was little changed.

Futures for Hong Kong’s Hang Seng index last traded at 24,252, pointing to a weaker open compared to the HSI’s last close of 24,366.94.

US stocks fell off the highs of the day, despite a better-than-expected inflation report.

The Dow Jones fell 250 points off the highs of the day to end flat, while selling in tech stocks meant both S&P 500 and Nasdaq underperformed.

The US Dollar fell to 2023-lows, while Gold prices saw a rebound from lower levels.

Futures on Wall Street are down even after US President Donald Trump announced that a deal with China is “done” and is only subject to approval from leaders of both countries.

However, Dow futures are currently down 100 points, S&P 500 futures are below the flat line, while the Nasdaq futures are down 60 points.

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