Asian-Pacific markets tumbled on Friday, with Japan taking the brunt of the selling pressure, as Wall Street experienced renewed losses overnight.
The renewed risk-off sentiment stems from escalating trade war tensions between the world’s two largest economies, offsetting earlier optimism following a brief tariff reprieve.
Australia’s S&P/ASX 200 fell 2.28%, reflecting the widespread nature of the downturn.
However, it was Japan that suffered the most significant losses, with the Nikkei 225 plunging 5.46% and the Topix trading 5.05% lower, signaling a deep unease among Japanese investors.
South Korea’s Kospi fell 1.55%, while the small-cap Kosdaq declined 0.11%, indicating a more moderate impact in the South Korean market.
Hong Kong’s Hang Seng Index was down 0.8%, and China’s CSI 300 dipped 0.13%, highlighting the continuing effect tariffs have on China and the global economy.
Tariff u-turn: a pause that fails to reassure
US President Donald Trump announced a surprising tariff U-turn on Wednesday, temporarily dropping the new reciprocal tariff rates on imports from most countries for 90 days.
“The extension of time does not alleviate uncertainty,” ANZ analysts wrote in a note, capturing the prevailing sentiment.
“There is skepticism about the outcome of trade negotiations, and that will continue to weigh on investment and thus the growth outlook,” they cautioned.
Cumulative pressure: China faces a 145% tariff burden
Adding to the concerns, the White House confirmed to CNBC on Thursday that the cumulative tariff rate on China would now reach a staggering 145%, consisting of the new 125% duty on goods, in addition to the existing 20% duty linked to the fentanyl crisis, highlighting the significant economic pressure facing Chinese businesses.
US stock futures edged higher on Friday as investors looked to close out a volatile week marked by sharp swings in the major averages, suggesting a degree of stability after a turbulent period.
S&P 500 futures added 0.3%, while Nasdaq 100 futures climbed roughly 0.1%. Futures tied to the Dow Jones Industrial Average ticked higher by 28 points, or nearly 0.1%.
Wall Street retreats
Overnight in the US, the three major averages closed lower, giving back some of the gains from the historic rally seen in the previous session, which had been fueled by President Donald Trump’s announcement of a 90-day reprieve on some of his “reciprocal” tariffs.
The S&P 500 sold off 3.46% and closed at 5,268.05, while the Nasdaq Composite slid 4.31% to end at 16,387.31.
The Dow Jones Industrial Average dropped 1,014.79 points, or 2.5%, settling at 39,593.66, illustrating the rapid reversal of sentiment.
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