Asian shares and US stock futures fell again on concern US president Donald Trump’s tariffs are here to stay after his administration reiterated its resolve to keep the levies amid a legal tussle.
A gauge of Asian shares dipped 0.5 per cent, trimming its biggest monthly gain since November 2023, amid uncertainty about the legal status of Trump’s planned tariff increases.
Sentiment towards equity markets also worsened after the Wall Street Journal reported the administration is considering a stop-gap effort to impose levies on swaths of the global economy.
Hong Kong shares dropped after US treasury secretary Scott Bessent said trade talks with China were “a bit stalled”.
Japan’s Nikkei saw the most pronounced selling, after experiencing the most pronounced buying on Thursday, with moves in the exporter-heavy index exacerbated by the ebb and flow in demand for the safe-haven yen.
The United States Court of Appeals for the Federal Circuit in Washington temporarily reinstated Trump’s duties on Thursday while it considers the government’s appeal.
On Wednesday, a little-known trade court had unanimously ruled Trump overstepped his authority, and tariffs were the jurisdiction of Congress not the president.
Either way, senior Trump administration officials said they were undeterred and expected either to prevail on appeal or to employ other powers to ensure the tariffs remain.
The Nikkei dropped 1.7 per cent in the Asian morning, putting it basically back at Wednesday’s closing level.
The yen strengthened about 2 per cent from its low on Thursday to last change hands at around 143.48 per dollar. A stronger yen reduces the value of overseas revenues.
Hong Kong’s Hang Seng sank 1.4 per cent and mainland China’s blue chip index eased 0.3 per cent in early trading.
South Korea’s KOSPI fell 0.5 per cent. MSCI’s broadest index of Asia-Pacific shares outside Japan was off 0.4 per cent.
“Trump’s trade agenda remains alive and kicking, with the legal battle adding yet another layer of uncertainty,” said Rodrigo Catril, senior FX strategist at National Australia Bank.
“The only thing that looks more certain is more uncertainty,” which will lead to additional delays in investment decisions and hiring, he said.
US S&P 500 futures retreated 0.2 per cent. The cash index rose 0.4 per cent overnight, but that was largely the effect of resilient Nvidia financial results from after the market close on Wednesday, to which Asian shares already had a chance to react.
Pan-European Stoxx 50 futures edged 0.1 per cent lower.
The 10-year US Treasury yield was steady at 4.42 per cent on Friday, following a 5.5 basis point slide on Thursday.
Safe-haven gold was little changed at $3,311 per ounce, following a 0.8 per cent advance in the previous session. Risk-sensitive bitcoin slipped to a 10-day low of $104,714.35.
Both Brent and US West Texas Intermediate crude eased 0.3 per cent early on Friday, to $63.97 and $60.75 per barrel, respectively. – Reuters
