Investing.com – Asian equities traded lower in morning trading on Friday, extending Wall Street’s selloff as U.S. President Donald Trump announced plans of tariffs on steel and aluminum imports that sparked fears of a global trade war.
Overnight, the S&P 500 slumped 1.33%, while the Dow also lost 1.7%.
The U.S. tariffs would raise steel and aluminum’s import prices, as Trump planned to slap a 25% duty on steel and 10% on aluminum. The tariffs are expected to be implemented broadly, without targeting any specific countries. An official announcement is expected sometime next week.
Asian steel maker shares fell following the news, with Japan’s Nippon Steel & Sumitomo Metal Corp. (T:5401) falling 4.2% by 10:15pm ET, South-Korea listed Posco Inc (KS:005490) and Hyundai Steel (KS:004020) tumbled 3.9% and 2.8% respectively, while China’s Chalco and Shanghai Baosteel Packaging Co Ltd (SS:601968) also slipped 1.1% and 3.3% respectively. Aussie miners were mixed, with Rio Tinto (LON:RIO) falling 1.8% while Bluescope Steel Ltd (AX:BSL)bucked the trend and rose 0.8%.
Meanwhile, Federal Reserve Chairman Jerome Powell’s second appearance was also in focus as he said there was “no strong evidence of a decisive move up in wages” and made investors drop bet on further rate hikes.
Japan’s Nikkei traded sharply lower in morning trade. A strengthening yen, boosted by bullish unemployment data, was cited as a catalyst for selling in local equities. The unemployment rate came in at 2.4% - near a 25-year low – versus the estimated 2.8%. The Nikkei slid to its lower level since October, down 3% to 21,097.35.
A separate data showed core consumer inflation in Tokyo, a leading indicator of nationwide price trends, accelerated to 0.9% in February from 0.7% last month. The Bank of Japan is still focusing on achieving the 2 percent inflation rate, as governor Haruhiko Kuroda said “easing won’t continue if CPI is 2% in a stable manner”.
Chinese, Australian and South Korean shares were also weaker after U.S. stocks posted a third day of decline. The Shanghai Composite and the Shenzhen Component lost 0.4% and 0.2% respectively, while Australia’s S&P/ASX 200 slumped 1.0% and South Korea’s KOSPI fell 1.5%.