Asia report: Markets fall on rising US economic concerns
By Josh White
Date: Thursday 22 May 2025
(Sharecast News) - Asia-Pacific markets declined on Thursday, mirroring overnight losses on Wall Street as investors reacted to rising US debt concerns. A sharp climb in Treasury yields, triggered by fears that a proposed US budget bill could deepen the country's fiscal deficit, weighed on global sentiment and risk appetite.
"Asian stocks declined while Treasuries stabilised following a sell-off driven by worries over a proposed tax-cut bill that could increase the US deficit," said TickMill market analyst Patrick Munnelly.
"The regional MSCI stock index fell modestly, pulling back from a seven-month high.
"US equity-index futures showed volatility after the S&P 500 index experienced its largest drop in a month."
Munnelly noted that opposition to US president Donald Trump's tax plans and the escalating deficit was becoming evident in bond markets, with Treasuries dropping across the board on Wednesday and causing declines in other US assets.
"JPMorgan's chief Dimon indicated on Thursday that he cannot dismiss the possibility of the US entering stagflation, as the nation faces significant risks from geopolitics, budget deficits, and inflationary pressures.
"Bond market concerns revolve around the idea that the tax bill could add trillions of dollars to already excessive budget deficits at a time when investor interest in US assets is diminishing globally.
"House Republican leaders unveiled a revised version of Trump's extensive tax and spending legislation, which includes a higher deduction limit for state and local taxes and other amendments aimed at garnering support from divided GOP factions."
Markets in the red across the board
Japan's Nikkei 225 fell 0.84% to 36,985.87, with Keisei Electric Railway plunging 10.87%, Kubota down 3.37%, and Advantest off 3.22%.
The broader Topix index also slipped 0.58% to 2,717.09.
In China, the Shanghai Composite dropped 0.22% to 3,380.19 and the Shenzhen Component lost 0.72% to 10,219.62, led by steep losses in Suzhou Longjie Special Fiber, Tianjin Benefo Tejing Electric, and Anhui Genuine New Materials, each down close to 10%.
Hong Kong's Hang Seng Index declined 1.19% to 23,544.31, weighed by Alibaba Health Information Technology, which fell 6.42%, Lenovo Group, down 5.43%, and Haidilao International, which dropped 4.43%.
In South Korea, the Kospi 100 index shed 1.34% to 2,578.57, with Hanwha Solutions tumbling 12.25% and losses across Doosan Bobcat and Hanon Systems.
Australia's S&P/ASX 200 edged down 0.45% to 8,348.70, dragged lower by Cromwell Property Group, Zip Co, and Nufarm, which fell between 6% and 8%.
New Zealand's S&P/NZX 50 dipped 0.32% to 12,662.25, with KMD Brands, Synlait Milk, and Heartland Group among the weakest performers.
In currency markets, the dollar was last down 0.19% on the yen, trading at JPY 143.41, as it gained 0.17% against the Aussie to AUD 1.5564, and advanced 0.59% on the Kiwi, changing hands at NZD 1.6936.
Oil prices were lower, with Brent crude futures last down 1.42% on ICE at $63.99 per barrel, and the NYMEX quote for West Texas Intermediate off 1.41% at $60.70.
Japan voices concern over US trade policy at G7 meeting
In economic news, Japan voiced concern over US trade policy, with finance minister Katsunobu Kato describing recent American tariffs as "regrettable" during a Group of Seven meeting in Banff, Canada, according to Reuters.
In a bilateral meeting with US Treasury secretary Scott Bessent, both parties agreed that the dollar-yen exchange rate should remain market-driven and that its current level reflected economic fundamentals.
Despite ongoing working-level trade discussions between Tokyo and Washington, Japanese officials reiterated their stance that a broader trade agreement with the US was unlikely unless tariffs on automobiles were lifted.
Kato also warned G7 counterparts that the US measures were "creating uncertainties" in the global economy.
Reporting by Josh White for Sharecast.com.
Email this article to a friend
or share it with one of these popular networks:
You are here: news
10 Lower Thames St,
London EC3R 6EN