Asia report: Markets join global slump amid trade war fears

In Japan, the Nikkei 225 fell 4.51% to 20,617.86, as the yen strengthened 0.15% against the dollar to last trade at JPY 105.12.

The strong safe-haven yen led to declines in the major exporters, with Honda Motor down 5.27% and Sony off 2.73%.

On the broader Topix index, which itself was down 3.62%, the machinery and mining indices were the big losers, falling 5.62% and 4.45% respectively.

On the mainland, the Shanghai Composite was down 3.38% at 3,153.09, and the smaller, technology-heavy Shenzhen Composite fell 4.49% to 1,766.61.

Steel and aluminium plays were under pressure in China, with the Trump administration singling the sector out as being a target for its punitive tariff regime.

Aluminium Corporation of China was down 3.51%, and Baoshan Iron & Steel was 3.887% lower.

South Korea’s Kospi was down 3.18% at 2,416.76, while the Hang Seng Index in Hong Kong was off 2.45% at 30,309.29.

Technology names dropped significantly on the Korean peninsula, with Samsung Electronics down 3.98% and SK Hynix 6.21% lower.

Steel stocks also saw steep losses in Seoul, with Dongbu Steel down 6.09% and Posco losing 5.58%.

The losses came despite the face South Korea remained temporarily exempt from Trump’s tariffs of up to 25%.

Asia’s losses came on the back of significant declines in the US and Europe on Thursday, after Trump put his signature to a memorandum to implement tariffs on up to $60bn of Chinese imports.

That memo was on top of the punitive tariffs on steel and aluminium implemented earlier in the month, although a number of countries were exempt from that measure.

Traders remained concerned that retaliatory actions from America’s trading partners could lead to a trade war.

“The real risk is that this escalates into tit-for-tat trade wars,” noted Mizuho Bank head of economics and strategy Vishnu Varathan.

Oil prices were higher, with Brent crude last up 0.29% at $69.11 per barrel and West Texas Intermediate adding 0.34% to $64.52.

In Australia, the S&P/ASX 200 lost 1.96% to close at 5,820.70, with losses led by the materials subindex, which was 2.68% lower.

Across the Tasman Sea, New Zealand’s S&P/NZX 50 slipped 0.99% to 8,515.36, led lower by dairy products and infant food producer and exporter Synlait Milk, which lost 4.5%.

The stock was still up 6.6% for the week, however, having released record first-half results on Wednesday.

Both of the down under dollars were stronger on the greenback, with the Aussie last ahead 0.41% at AUD 1.2946 and the Kiwi advancing 0.68% to NZD 1.3789.