Asian stocks extended a global decline on Tuesday, while the yen strengthened when US President Donald Trump threatened new tariffs on Chinese products in a growing trade war between the two biggest economies in the world that has shaken financial markets.
Trump warned on Monday that Washington would impose a 10 percent tariff on $ 200 billion of Chinese products after Beijing’s decision to increase tariffs on $ 50 billion in US goods. UU Trump said that if China increases its tariffs again in response to the latest US measure. UU., “We will comply with that measure by applying additional tariffs on another $ 200 billion of goods.”
The retaliatory measures come after Trump said last week that he was imposing tariffs on 50 billion dollars in Chinese imports.
Trade frictions have kept financial markets on edge, with investors increasingly concerned that a full-blown trade dispute could derail global growth.
Futures on the S & P 500 ESc1 were down 0.6 percent, pointing to another day of losses for Wall Street shares, which fell on Monday.
The broader MSCI index of Asia and the Pacific shares outside Japan fell 0.1 percent.
The Nikkei of Japan lost 0.45 percent, the KOSPI of South Korea fell 0.1 percent, while the Australian shares added 0.3 percent.
The dollar fell 0.45 percent to 110.06 yen after Trump’s tariff comments. The yen is often sought in times of market turmoil and political tensions.
“Financial markets are trying to take a breather after last week, when there was a lot of news, but US-China trade remains a persistent issue, at least until US tariffs come into effect in early July.” said Masahiro Ichikawa, senior strategist. at Sumitomo Mitsui Asset Management in Tokyo.
“While commercial tensions are not a positive issue, the market has become accustomed to President Trump’s comments, which appear to be negotiation tactics.”
The euro rose 0.05 percent to $ 1.1631 EUR =. The Australian dollar, often seen as a proxy for business related to China, lost 0.25 percent to $ 0.7404.
In commodities, oil markets remained volatile before the OPEC meeting on Friday at a time when Russia and Saudi Arabia are pushing for higher production.
Brent LCOc1 futures were down 0.3 percent at $ 75.11 a barrel after a 2.5 percent spike overnight.