Asian markets have suffered steep losses\, with major indices across the region plunging amid intensifying fears of a global trade war. The selloff followed a dramatic collapse on Wall Street and a sharp escalation in tensions between the US and China.
At the present time, Japan’s Nikkei 225 is down 6.95% to 23,491.8, the Shanghai Composite has fallen 6.34% to 3,130.17, and Hong Kong’s Hang Seng has dropped 10.70% to 2,445.19 points. South Korea’s Kospi index is 5.24% lower at 2,336.33, while the S&P/ASX 200 has declined 4.56% to 7,318.40.
The turmoil was triggered by China’s decision to retaliate against the latest round of US tariffs by imposing a sweeping 34% duty on all American imports from April 10. The announcement came after Asian markets had closed last week, fuelling fears over the weekend and sparking panic selling when trading resumed.
In Tokyo, a wave of selling hit banking stocks particularly hard. Shares in Mizuho Financial Group dropped 11.3%, while Mitsubishi UFJ Financial Group tumbled 9.9%. A circuit breaker was triggered after Topix futures plunged in early trading.
Technology stocks were also badly hit across Asia. Alibaba Group Holdings fell 10% in Hong Kong, while Tencent Holdings shed 9.4%. In Taiwan, TSMC and Foxconn both fell around 10% and triggered circuit breakers as the Taiex index dropped more than 9.7%.
Oil prices were caught in the selloff, with WTI crude down as low as US$59.49 per barrel, though it is now 2.45% lower at US$60.47 per barrel. The drop marks the first time US oil has traded below US$60 since April 2021. Brent crude has fallen 2.39% to US$64.01.
The Japanese yen, traditionally viewed as a safe haven in times of financial stress, rose slightly, with the US dollar falling to 146.70 yen. The euro also eased to US$1.0926.
The selloff follows a bruising two-day collapse on Wall Street, where the S&P 500 lost 6%, the Dow Jones Industrial Average dropped 5.5%, and the Nasdaq Composite fell 5.8% on Friday. US stock futures point to further losses, with S&P 500 futures down 2.5%, Dow futures down 2.1%, and Nasdaq futures off 3.1%.
The sharp declines have come despite economic data showing resilience in the US labour market. Analysts say the escalating trade war, not fundamentals, is now driving markets.
Nathan Thooft of Manulife Investment Management said that while countries may eventually strike trade deals, the timeline will be long: “It will take a considerable amount of time… to work through the various negotiations,” he said. “Market uncertainty and volatility are likely to persist for some time.”
The White House has shown no signs of backing down. On Sunday, President Trump wrote on social media: “THIS IS A GREAT TIME TO GET RICH,” before heading to his Mar-a-Lago golf course. Trade adviser Peter Navarro also urged calm, saying, “People should just sit tight… don’t get shook out by the panic in the media.”
But economists have warned that tariffs are already weighing on global trade and may soon hit US consumers. The People’s Daily, China’s state-run newspaper, published a commentary asserting China has the “capacity to withstand the pressure” and is ready with “plenty of countermeasures.”
Markets in Taiwan, Singapore, and Saudi Arabia have also plunged. The Saudi bourse fell 6.78% on Sunday, the steepest daily drop since the onset of COVID-19. Singapore’s Straits Times Index slid 8.5%, and circuit breakers were triggered in Seoul and Taipei.
Amid growing global concern, world leaders have appealed for compromise. Japan’s Prime Minister Shigeru Ishiba said he would urge the US to reverse tariffs on Japanese goods, while Taiwan’s President Lai Ching-te offered increased purchases of US products as part of negotiations.
Yet Trump has remained defiant. “I’m willing to deal with China, but they have to solve their surplus,” he told reporters aboard Air Force One. “Sometimes you have to take medicine to fix something.”
With the S&P 500 now down 17.4% from its February peak and edging toward bear market territory, market strategists warn that valuations may still not fully reflect the damage.
“There is ample space to the downside despite the large pullback,” wrote Citi’s Stuart Kaiser in a note to clients. Lazard strategist Ronald Temple warned of more pain ahead: “I now expect the economic damage to be more severe than would have been the case in a gradual escalation.”
The Federal Reserve is under pressure to ease monetary policy to cushion the blow. But Chair Jerome Powell cautioned Friday that lower rates could stoke inflation if tariffs persist.
The Trump administration maintains that its hardline approach will ultimately deliver long-term gains. But with trillions of dollars already wiped from global markets, the near-term outlook remains grim—and for now, the volatility shows no sign of abating.
