Asia report: Markets fall on US tariff concerns
By Josh White
Date: Friday 28 Mar 2025
(Sharecast News) - Asia-Pacific markets declined on Friday as investor sentiment remained cautious following fresh tariff threats from US president Donald Trump.
The sell-off was widespread across major indices, with losses in Japan, China, South Korea, and Hong Kong.
In a separate development, the Stock Exchange of Thailand halted all trading after a strong earthquake in neighboring Myanmar, adding to regional uncertainty.
"Asian stocks fell on Friday, with sharp declines in South Korea and Japan as safe-haven gold surged to an all-time high," said TickMill market strategy partner Patrick Munnelly.
"The sell-off followed the announcement of new tariffs by president Trump, escalating fears of a potential trade war among investors.
"Trump unveiled a 25% tariff on auto imports set to take effect next week, sparking widespread criticism from global politicians and industry leaders."
Munnelly noted that automakers worldwide warned of looming price hikes as a result of the tariffs, adding that the escalating trade tensions, initiated by Trump after his election, were rattling financial markets, particularly weighing on the shares of international automakers.
"In Asia, Japan's Nikkei index tumbled over 2%, led by steep losses in Toyota and Honda stocks.
"South Korea's benchmark index dropped to a two-week low, as the automotive sector remains vital to both nations' economies.
"Trump hinted at the possibility of reducing tariffs on China to finalise a deal with ByteDance, the Chinese parent company of TikTok, regarding the app's sale."
Japan leads broad declines across the Asia-Pacific region
Japan led the declines, with the Nikkei 225 falling 1.8% to 37,120.33 and the Topix down 2.07% to 2,757.25.
Shares of automakers and financials were hit hard, with Honda Motor sliding 4.88% and Daiwa Securities Group losing 4.72%.
CyberAgent also dropped 5.54%.
The drop came after Trump reiterated plans to impose 25% tariffs on foreign-made vehicles, though he later signalled a more lenient stance, particularly in relation to China.
In China, the Shanghai Composite lost 0.67% to close at 3,351.31, while the Shenzhen Component declined 0.57% to 10,607.33.
Leading decliners included CITIC Heavy Industries, Shandong Lubei Chemical, and Suli Co, all falling more than 10%.
The Hang Seng Index in Hong Kong dropped 0.65% to 23,426.60, weighed down by steep losses in Haier Smart Home, Semiconductor Manufacturing International Corporation, and Lenovo.
South Korea's Kospi 100 shed 2.16% to 2,587.20, dragged lower by sharp declines in Korea Zinc, Cosmoam&T, and Industrial Bank of Korea.
In contrast, Australia's S&P/ASX 200 managed a modest gain of 0.16% to 7,982.00, supported by strength in gold miners such as Ramelius Resources and Regis Resources.
New Zealand's S&P/NZX 50 slipped 0.15% to 12,287.46, with healthcare and tourism stocks among the weakest performers.
In currency markets, the dollar was last down 0.21% on the yen, trading at JPY 150.73, as it gained 0.16% against the Aussie to AUD 1.5886 and advanced 0.37% on the Kiwi, changing hands at NZD 1.7486.
Oil prices were weaker, with Brent crude futures last down 0.24% on ICE at $73.85 per barrel, while the NYMEX quote for West Texas Intermediate lost 0.26% to $69.74.
Tokyo inflation rises more than expected, gold futures reach fresh high
In economic news, Tokyo's core inflation rose more than expected in March, underscoring persistent price pressures in Japan's capital.
The core consumer price index, which excludes volatile fresh food prices, climbed 2.4% year-on-year, surpassing both forecasts and February's 2.2% increase.
The broader CPI held steady at 2.9% for the second straight month, signalling that inflationary trends remained firmly in place ahead of the Bank of Japan's next policy meeting.
Meanwhile, gold prices surged to a new all-time high as demand from investors and central banks continued to support the precious metal.
COMEX gold futures reached $3,082.70 per ounce, extending a rally driven by safe-haven flows and persistent geopolitical and economic uncertainty.
Goldman Sachs raised its year-end price target for gold to $3,300 per ounce from $3,100, citing strong and sustained buying by Asian central banks.
The bank noted that such demand could continue for several more years, adding momentum to gold's upward trajectory.
Reporting by Josh White for Sharecast.com.
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