Asian-Pacific markets resumed declines on Friday as heightened tensions in the United States-China trade dispute reignited investor fears and triggered a broad sell-off across the region.
By 11 am AEST (1 am GMT), Japan’s Nikkei 225 plunged 5.2%, leading losses in the region. South Korea’s Kospi 200 was down 1.9%, while Australia’s S&P/ASX 200 fell 2.2%.
The latest wave of market volatility follows U.S. President Donald Trump’s abrupt shift in trade policy. On Wednesday, Trump announced a 90-day suspension of newly introduced reciprocal tariffs for most trading partners, excluding China. While initially welcomed, the pause has done little to calm investor anxiety.
Analysts at ANZ said in a note: “Extension of time does not alleviate uncertainty. There is scepticism about the outcome of trade negotiations, and that will continue to weigh on investment and thus the growth outlook.”
U.S. stocks posted significant losses overnight as the tariff drama rattled investors. The Dow Jones Industrial Average fell 1,014.8 points, or 2.5%, closing at 39,593.7. The S&P 500 dropped 3.5% to 5,268.1, and the Nasdaq Composite slid 4.3% to end at 16,387.3.
In commodities, Brent crude oil prices declined 3.3% to US$63.33 per barrel, while gold surged 3% to a new record high of US$3,175.37 per ounce, as investors sought safe-haven assets amid the uncertainty.
Despite the regional downturn, Chinese equities bucked the trend on Wednesday, with the Shanghai Composite gaining 1.2% to 3,223.6 and the CSI 300 rising 1.3% to 3,735.1. Hong Kong’s Hang Seng Index also advanced 2.1% to 20,681.8. India’s BSE Sensex was closed for a public holiday.
In Europe, major benchmarks finished higher. The UK’s FTSE 100 gained 3% to 7,913.3, Germany’s DAX climbed 4.5% to 20,562.7, and France’s CAC 40 rose 3.8% to 7,126.0.
