Asia report: Markets fall after US-China trade talks flounder, yen pops higher

Most Asian markets fell on Monday after US President Donald Trump more than doubled its tariffs on $200bn of Chinese goods, from 10% to 25%, following the two countries' failed attempt to conclude a trade agreement at the end of last week.

Meanwhile, the Office of the United States Trade Representative said it has been commanded to "begin the process of raising tariffs on essentially all remaining imports from China, which are valued at approximately $300bn".

Trump insisted on Twitter that his administration was "right where we want to be with China" and stated that the US would be "taking in tens of billions of tollars in tariffs from China", though Larry Kudlow, his top economic adviser, admitted that "both sides will suffer".

Joshua Mahony, senior market analyst at IG, said: "Unfortunately for all the hope of a last-minute compromise, we are now looking at the possibility of another bout of tariffs on $300bn of Chinese goods as Trump takes aim at driving home the huge differential in trade between the two sides. With Trump angling for another four-year term, and the Chinese Foreign Minister promising that there will be ‘no surrender’ to foreign. pressure, thus there is a very real threat that the current setback is the beginning of yet another drawn out phase of the trade war as they seek to show strength domestically."

Japan's Nikkei 225 was lower for a sixth consecutive session, dropping 0.72% to 21,191.28 as index heavyweight Softbank Group fell by 3.25% and Sumitomo Electric dipped by 1.15% after its operating profit forecast failed to live up to analyst expectations.

Weighing on Softbank was US ridehailing company Uber's - in which it holds a stake - failed flotation last Friday

Amid the risk-off appetite in financial markets, the US dollar fell by 0.74% to JPY109.13.

The Shanghai Composite index dropped 1.21% to 2,903.71, while the tech-heavy Shenzhen Composite was 1.08% lower to 1,551.75 amid trade concerns, though Vice Premier Liu He insisted that China could weather the challenges of its dispute with the US.

The Hong Kong Hang Seng index remained closed on Monday for a public holiday but South Korea's Kospi hit a four-month low after it fell by 1.38% to 2,079.01 as bellwether Samsung Electronics dropped 0.58%.

Meanwhile, Brent Crude was up by 1.82% at $71.93 and WTI climbed by 1.53% to $62.62 as reports of the attempted sabotage of two Saudi oil tankers in the Gulf of Oman sparked concerns over oil security.

Down under, Australia's S&P/ASX 200 was down 0.21% at 6,297.59 as financial stocks weighed on the index, with Australia and New Zealand Banking Group sliding by 4.16% as it went ex-dividend and Commonwealth Bank of Australia falling 2.77% on the back of an uninspiring quarterly trading update.

New Zealand's S&P/NZX 50 was a rare climber, creeping upwards by 0.27% to 10,126.83 after Trustpower climbed 2.9% to hit NZ$7.20 after declaring a special dividend of 15 cents per share and Spark New Zealand rose 1.8%.

Finally, the Australian dollar dropped 0.36% against the greenback to AU$1.43, while New Zealand's dollar fell by 0.10% to NZ$1.52.