By Kevin Buckland
TOKYO (Reuters) – Equities slumped in Asia on Friday and the U.S. dollar hovered near multi-week highs against the currencies of the country’s top trading partners as concerns about an escalating global trade war soured market sentiment.
Technology shares took an additional hit following a sell-off in AI darling Nvidia and other so-called «Magnificent Seven» Wall Street mega-cap stocks, as investors judged the chipmaker’s earnings report harshly a day after it was released.
The safe-haven yen and Swiss franc strengthened, with Japan’s currency getting an additional boost from lower U.S. Treasury yields.
An overall firmer dollar weighed on commodities including gold, although oil held on to most of Thursday’s strong gains spurred by U.S. President Donald Trump’s cancellation of Chevron’s Venezuela licence.
Trump said on Thursday that 25% duties on imports from Canada and Mexico will come into effect on March 4 – not April 2 as he had suggested the day prior – and said goods from China will be subject to an additional 10% duty. He also this week promised 25% tariffs on shipments from the European Union.
«A market that had reduced its sensitivity to recent tariff headlines has had to reconsider that reaction function,» said Chris Weston, head of research at Pepperstone.
«The cleanest reaction has been seen in the FX channels,» he said, noting the hit to the Canadian dollar and the euro.
Japan’s Nikkei tumbled 2.4% early in Friday’s session, buckling under the weight of a stronger yen, while South Korea’s Kospi sank 1.8% and Australia’s stock benchmark sagged 0.9%.
Chinese equities fared relatively better in early trading, with Hong Kong’s Hang Seng down 1% and mainland blue chips down 0.3%.
Many analysts project that Trump’s trade policies raise the odds of additional stimulus from next week’s meeting on China’s National People’s Congress.
Pan-European STOXX 50 stock futures pointed 0.8% lower, after bourses around the region retreated on Thursday.
U.S. S&P 500 futures were flat following a 1.6% tumble for the cash index overnight.
World stocks are on track for their worst week since mid-December, slumping more than 2%.
The U.S. dollar index – which gauges the greenback against six major peers including the euro, yen and franc – edged down to 107.20, but started the session at the highest since February 19 at 107.34.
The euro was steady at $1.04 after earlier dipping to $1.0389 for the first time since February 13.
The Swiss currency gained slightly to 0.8986 francs per dollar, bouncing off Thursday’s low of 0.9005 francs.
Story Continues
