Asia report: Most markets lower on Trump's tariff surprise
Markets in Asia finished mostly in the red on Friday, as a surprise tariff announcement from the White House overnight saw trade tensions between Washington and Beijing rise once again.
In Japan, the Nikkei 225 was down 2.11% at 21,087.16, as the yen strengthened 0.43% against the dollar to last trade at JPY 106.88.
Of the major components on the benchmark index, automation specialist Fanuc was down 3.77%, fashion firm Fast Retailing lost 0.93%, and technology conglomerate SoftBank Group was off 2.53%.
Technology component company Murata Manufacturing was among the Asia-based Apple suppliers suffering on Friday, after the California computing giant saw its share price slide on Wall Street overnight.
Murata stock was down 1.62% in Japan.
The broader Topix index was off 2.16% in Tokyo, to close its trading session at 1,533.46.
On the mainland, the Shanghai Composite was 1.41% lower at 2,867.84, and the smaller, technology-heavy Shenzhen Composite fell 1.48% to 1,539.86.
The moves in China, and indeed across the region, came after US president Donald Trump sadi overnight that his administration was slapping a 10% tariff on another $300bn of Chinese goods, starting 1 September.
In response to the surprise move, the foreign ministry in Beijing said that the country was not looking for a trade war, but added it was not afraid to fight one.
The move was unexpected, given the two countries ended their latest round of trade talks earlier in the week, with another round planned in Washington in early September.
It also went against the ceasefire agreed between Trump and his Chinese counterpart Xi Jinping at the G20 summit in Japan in June.
“Talks between the US and China will continue in September, but there is no apparent willpower to resolve the yearlong trade dispute,” said London Capital Group senior market analyst Ipek Ozkardeskaya.
“Trump threatens to ‘tax the hell out of China’ and to raise the tariffs to 25% if there is no progress in talks.”
Ozkardeskaya said those attacks could make it gradually harder to find a common ground between the two countries.
“China’s Wang Yi said that this is not a way to resolve frictions.
“The risk is that the US’ rising pressure on China could backlash and compromise the future of negotiations.”
South Korea’s Kospi was 0.95% weaker at 1,998.13, while the Hang Seng Index in Hong Kong lost 2.35% to 26,918.58.
The blue-chip technology stocks were down in Seoul, with Samsung Electronics off 0.55% and SK Hynix 2.06% weaker.
Korean Apple supplier LG Display was affected by the former’s share price movements overnight, too, with its shares down 5.56%.
Of the Apple suppliers based in Hong Kong, Sunny Optical was down 7.77% and Hon Hai Precision Industry - better known as Foxconn - was off 3.08%.
Sentiment around local geopolitical tensions was not faring much better than that around the US-China trade war, as Japan’s cabinet approved a plan to remove South Korea from its ‘white list’ of preferential trade partners on Friday.
It came after Tokyo began restricting the export of certain high-technology materials to South Korea last month, hampering the ability of Korean tech manufacturers to go about their business.
In response to the move on Friday, the South Korean finance minister said the country would now go about removing Japan from its own list of countries which enjoyed ‘fast-track’ export privileges.
Oil prices were higher as the region went to bed, with Brent crude last up 2.09% at $61.79 per barrel, and West Texas Intermediate rising 1.77% to $54.92.
In Australia, the S&P/ASX 200 slipped 0.3% to 6,768.60, even after the sunburnt country reported its fastest retail sales growth in four months during the day.
Across the Tasman Sea, New Zealand’s S&P/NZX 50 was the odd one out in the region, eking out gains of 0.03% to 10,863.87, led higher by energy firm Contact, which was up 1.8%.
Both of the down under dollars were weaker on the greenback, with the Aussie last off 0.17% at AUD 1.4726, and the Kiwi retreating 0.44% to NZD 1.5319.