Asia stocks under pressure; China, Japan see significant losses, down about 7% amid trade war

Continuing their downward trend, Asian stocks tumbled further on Monday, as the global trade war, initiated by President Trump’s broad tariff announcement, deepened a widespread market sell-off. This came after the US announced sweeping tariffs last week, prompting retaliation from major economies and raising concerns about a potential global trade conflict that could hinder economic growth. Bitcoin ( BTC-USD ) retreated below 78,000, mirroring the broader market selloff that has shaken investor confidence. Gold dropped more than 1% to below $3000 in the early Monday session in Asia as investors offloaded bullion to offset losses from a broader market downturn triggered by escalating trade tensions and growing fears of a global recession. Japan ( NKY:IND ) fell 6.74% to below 30,000 on Monday, hitting its lowest levels since October 2023. The Japanese yen strengthened to around 145 per dollar on Monday before retreating toward 147, remaining volatile as the market turmoil triggered by an escalating global trade war intensified. Domestically, Japan saw accelerated nominal wage growth in February rose 3.1% year-on-year, offering a positive outlook for the economy, which is under pressure from global trade uncertainties. Japanese Prime Minister Shigeru Ishiba plans to visit the U.S. soon to present a trade proposal and urge President Trump to reconsider a 24% tariff on Japanese imports. Japan’s foreign reserves increased by $19.23 billion to $1.27 trillion in March 2025, hitting the highest level since April last year. Japan’s index of coincident economic indicators, which tracks factory output, employment, and retail sales, increased to 116.9 in February 2025 from a final 116.1 in the previous month, flash data showed. China ( SHCOMP ) fell 6.56%,to below 3,200 while the Shenzhen Component dropped 7.3% to 9,610 in post-holiday trade on Monday, with mainland stocks tracking the global selloff as the trade war intensified, and the offshore yuan depreciated around 7.32 per dollar, hitting its lowest level in two months. Markets are bracing for deeper trade disruptions, especially after China announced a 34% tariff on all US imports starting April 10, alongside export controls on rare earths. Additionally, Beijing added 16 American firms to its export control list and labeled 11 more as “unreliable entities.” Trump quickly denounced the response, calling it the “wrong” move. Furthermore, China indicated it might lower borrowing costs and reserve requirements for lenders to mitigate the economic effects of U.S. tariffs, with potential cuts to key policy rates and fiscal expansion. China’s foreign exchange reserves rose by USD 13.4 billion to USD 3.241 trillion in March 2025, up from USD 3.227 trillion in February, marking the highest level since last November. Hong Kong ( HSI ) fell 10.91%, to 20,710 in early trading on Monday, marking a second session of steep losses and hitting their lowest in two months. The selloff reflected widespread panic across sectors, as investors fled riskier assets amid an escalating global trade war and growing fears of a recession. India ( SENSEX ) fell 4.05% to 72,535 in early deals on Monday, falling for the third straight session and weighed down by all sectors. Traders braced for the imposition of a 26% reciprocal tariff on India, set to take effect on April 9. India is unlikely to immediately retaliate against President Trump’s recent 26% tariff on US imports from India and is instead focusing on negotiating a bilateral trade deal to lower duties, Reuters said, quoting a government official. However, the RBI is expected to cut the interest rate by 25 bps to 6% at Wednesday’s meeting. Australia ( AS51 ) fell 4.19% hitting the lowest level since December 2023, extending losses for the third session. The Australian dollar fell to around $0.60 on Monday, its lowest level since the peak of the COVID-19 pandemic in March 2020. In the U.S., on Thursday, all three major indexes ended in red , markets were shaken by trade war fears, and U.S. stocks deepened their sell-off on Friday, particularly after Fed Chair Jerome Powell cautioned that the economic impact could exceed expectations U.S. stock futures tumbled sharply on Monday, with the White House showing no signs of backing down, even after a two-day rout on Wall Street triggered by President Trump’s sweeping tariffs on major trading partners: Dow -2.88%; S&P 500 -3.58%; Nasdaq -4.51%. Currencies: ( JPY:USD ), ( CNY:USD ), ( AUD:USD ), ( INR:USD ), ( HKD:USD ), ( NZD:USD ). More on Asia: Chinese markets only winner in the aftermath of Trump’s tariff carnage China, EU revive EV tariff talks following U.S. trade actions Japan’s Mar services PMI revised higher to 50; yen rallies amid trade war concerns Australia’s trade surplus shrinks to 2020 low; imports surge, exports fall China government debuts green sovereign bond offering

Source: Seeking Alpha