(Sharecast News) - Markets across the Asia-Pacific region declined sharply on Friday, led by Japan, as investors reacted to a global selloff sparked by sweeping new US tariffs announced by president Donald Trump.
The measures, which apply reciprocal tariff rates on imports from over 180 countries and territories, stoked fears of a global trade war and triggered the steepest drop in US equities since the early days of the Covid-19 pandemic five years ago.
"Asia has experienced another painful day following significant losses on Wall Street; the combined market value of S&P 500 companies plummeted by $2.4trn, marking their largest single-day decline since the onset of the coronavirus pandemic on 16 March 2020," noted TickMill market strategy partner Patrick Munnelly.
"Other Wall Street indexes also experienced significant drops.
"This severe market selloff followed Trump's announcement on Wednesday of the most stringent trade barriers in over a century, prompting investors to seek safer assets."
Munnelly noted that taking their cue from US markets, Japanese markets tanked, with the Nikkei turning in a "staggering" weekly decline of almost 10%.
"Amid growing concerns about a global recession, especially in the US, traders have increased their expectations for more Federal Reserve rate cuts this year, believing that policymakers will need to act more decisively to support growth in the world's largest economy.
"Fed funds futures now indicate approximately 96 basis points of cuts by December, up from around 70 basis points just before Trump's tariffs were announced on Wednesday."
Markets slide across the region on back of Trump tariff announcement
Japan's Nikkei 225 plunged 2.75% to 33,780.58, extending its losses as export-focused stocks were hit hard.
The broader Topix index fell 3.37% to 2,482.06.
Shares of Renesas Electronics, Fujikura, and Kawasaki Heavy Industries sank more than 11% each, reflecting concerns over trade disruption and a potential slowdown in global demand.
South Korea's Kospi 100 fell 1.4% to 2,474.48, dragged lower by semiconductor giant SK Hynix, which dropped 6.37%.
Kogas and Samsung Engineering also saw steep declines, losing 5.65% and 4.71%, respectively, amid broader risk aversion.
In Australia, the S&P/ASX 200 fell 2.44% to close at 7,667.80.
High-growth and consumer-focused companies led losses, with Amotiv plunging 16.72%, followed by Zip Co and Breville Group, down 14.09% and 12.01%, respectively.
New Zealand's S&P/NZX 50 declined 0.92% to 12,225.28, as investors sold off tourism and retail stocks.
Skellerup Holdings fell 6.62%, while KMD Brands and Tourism Holdings dropped 5.48% and 4.62%.
Markets in China and Hong Kong remained closed for the Qingming Festival holiday.
Currency markets reflected the flight to safety, with the dollar last 0.29% stronger on the yen, trading at JPY 146.48, while it rose 1.97% against the Aussie to AUD 1.6113, and advanced 1.75% on the Kiwi, changing hands at NZD 1.7561.
Oil prices also retreated amid mounting concerns about global demand.
Brent crude futures were last down 3.18% on ICE at $67.91 per barrel, while the NYMEX quote for West Texas Intermediate fell 3.42% to $64.66.
Trump tariffs to cost technology sector close to $100bn
In economic news, the South Korean won gained against the dollar on Friday after the country's Constitutional Court upheld the impeachment of president Yoon Suk Yeol.
Yoon was removed from office over his declaration of martial law in a surprise late-night address on 3 December, citing threats from "North Korean communist forces" and "anti-state elements".
It marked South Korea's first imposition of martial law in more than four decades.
In Australia, several major pension funds fell victim to a wave of coordinated cyberattacks that compromised thousands of member accounts, according to local media reports.
Among those affected were AustralianSuper, Hostplus, Australian Retirement Trust, Insignia Financial, and REST, one of the country's largest funds for retail workers.
Authorities launched investigations amid growing concerns over data security and financial fraud.
Meanwhile, CreditSights estimated that the latest round of US tariffs announced by US president Donald Trump could cost the technology sector close to $100bn.
The research note assessed the proposed "reciprocal tariff" rates by country and applied them to last year's US tech import values.
Its estimate excluded previously-implemented tariffs, such as recent hikes on imports from China, Mexico, and Canada.
The firm warned that the new measures would weigh heavily on smartphone makers, particularly Apple, whose supply chains remained concentrated in China.
While Apple had expanded production to Vietnam and India, CreditSights noted that those countries would also be subject to significant reciprocal tariffs of 46% and 26%, respectively.
Reporting by Josh White for Sharecast.com.
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