Most Asian stock markets register decreases in a reserved trading session, contrasted by the Nikkei's upward trajectory.
U.S. Tariffs Continue to Impact Asian Markets
Asian stock markets experienced a mixed performance on Friday, with many ending lower, due to ongoing reciprocal tariffs imposed by U.S. President Donald Trump targeting over 90 nations.
In Japan, the Nikkei 225 Index and the Topix Index saw significant gains earlier in the week, rising 1.9% and 1.2% respectively, surpassing the 3,000 points mark for the first time. However, these gains were partially offset by profit-taking expectations related to the planned U.S.-Russia summit, causing Seoul stocks to end lower.
Japan’s stock market has been significantly impacted by the tariffs, with a historic single-day drop due to tariffs affecting key exporters to the U.S. Analysts estimate that these tariffs could reduce Japan’s GDP by approximately 0.8% due to its export dependence on the U.S. Despite some ongoing trade negotiations and recent agreements, such as a new deal with Japan imposing a reduced 15% tariff instead of a potential 20% baseline tariff, uncertainty remains high across Asian markets.
Tariffs on China remain suspended but partly in effect, maintaining uncertainty for trade flows. Threats to raise baseline reciprocal tariffs further add to market jitters across Asia, with actual tariff rates expected to range from 15%-20%.
In Hong Kong, the Hang Seng Index fell 0.9%, while China's Shanghai Composite Index edged down 0.1%. In the U.S., the tech-heavy Nasdaq Composite rose 0.4%, but the Dow fell half a percent.
Meanwhile, in the U.S., Trump tapped Stephen Miran, one of his top economic advisers, to temporarily serve on the Federal Reserve's Board of Governors. This move came as three Federal Reserve officials voiced concerns over the labor market, as data showed continuing claims for unemployment benefits reached their highest level since November 2021.
Gold held firm above $3,400 per ounce on Fed rate cut bets, while oil was set for its deepest weekly loss since June due to worries about too much oil supply. New Zealand's S&P/NZX-50 Index slipped 0.3% due to concerns over the impact of the newly imposed U.S. tariffs on the domestic economy.
In summary, investment analysts expect continued volatility and range-bound equity performance until clearer broad trade agreements emerge. These effects illustrate persistent economic strains and market uncertainty in Asian countries closely tied to U.S. trade measures under Trump's tariff policies.
sports-related businesses in Japan might struggle due to the impacts of the tariffs, as the country's export-dependent economy could be reduced by approximately 0.8%with widespread uncertainty across Asian markets, investors may hold off on making significant investments in sports sectors until clearer broad trade agreements emerge.
