SHANGHAI / TOKYO (Reuters) – Asian stocks staggered on Friday when Washington imposed tariffs on Chinese imports, a move many investors fear could be the start of a large-scale trade war between the two largest economies. of the world.
US tariffs on more than 800 Chinese goods worth $ 34 billion came into effect at 0401 GMT. President Donald Trump warned that the United States could target more than 500 billion dollars in Chinese products, an amount that roughly coincides with its total imports from China last year.
The Chinese Ministry of Commerce said shortly after the United States tariffs came into force that it was forced to retaliate, which means that $ 34 billion of goods imported from the United States, including automobiles and products agricultural, are also subject to tariffs of 25 percent.
MSCI's broader index of Asia and the Pacific shares outside Japan was 0.1 percent lower, receding from a modest early rise. The index has lost about 9 percent since June 7.
The Shanghai Composite Index ended down 0.3 percent in the morning, before the rates went into effect, and trading will resume at 0500 GMT. Earlier on Friday, the index fell to 1.6 percent to 2,691, approaching its January 2016 low of 2,638.
"China will surely take retaliatory measures, against which US President Donald Trump has threatened more tariffs," said Norihiro Fujito, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities.
A commercial war "now has become a reality," he said.
"If this was a boxing match, the first round has just started, it's going to be a long process, and Trump is unlikely to back off easily before the mid-term elections in the United States (in November), especially given the recent increase in its popularity, "said Fujito.
The Kospi index in Seoul fell in the morning, fell by 0.25 percent and shares in Taiwan were 0.50 percent lower. Shares in Singapore, one of the main commercial centers in the region, fell more than 2.0 percent to 14-month lows.
Japan's Nikkei stock index rose 1.1 percent from Thursday's three-month low, helped in part by an increase in auto makers' shares with signs that Washington and the European Union could be looking for a compromise on car rates.
"How that will be resolved, I think it will remain a big point of contention, but at least they are talking and I think that as long as the coldest heads prevail, that is the positivity that emanates from the markets," said Stephen Innes, head of operations of APAC in OANDA.
Shares of Japanese automakers rose 1.4 percent, with Toyota Motor up 1.6 percent and Honda Motor up 1.5 percent. Hyundai Motor of South Korea rose 2.9 percent.
In Europe, auto maker shares rose 3.4 percent on Thursday.
Even so, many market players remained cautious given the risk of further escalation in the trade war between China and the United States.
Copper, seen as the barometer of global economic strength due to its widespread industrial use, extended its losses to $ 6.236 per ton, down 1.7 percent on the day. It has fallen 15 percent since its peak only a month ago.
In the currency market, the yuan eased slightly in a hectic trade, although it remained some distance from the 11-month lows touched this week.
The renminbi is trading at 6.6534 per dollar, 0.25 percent lower compared to Tuesday's low of 6.7204.
The last minutes of the last US Federal Reserve policy meeting on June 12 and 13 showed that the authorities were discussing whether the recession was just around the corner and expressed concern that global trade tensions would affect an economy that seemed to be solid.
The yield on 10-year Treasury bonds was 2.8364 percent, compared to the close of 2,840 percent in the United States.
The two-year yield, which increases with the expectations of the operators of higher Federal Reserve funds rates, was 2,553 percent compared to the US closing of 2,561 percent.
The dollar registered few changes against the yen at 110.67.
The single currency lowered one hair in the day by $ 1.1685, while the dollar index, which tracks the dollar against a basket of six major rivals, remained flat at 94.474.
After a little higher, oil prices fell after the US government data. UU They showed an unexpected jump in crude oil stocks.
However, the market remains nervous about concerns about tariffs amid an increasingly tight oil market.
Tensions between the US UU And Iran continued to increase when the US Navy. UU He said he was ready to guarantee free navigation and the flow of trade, after the Iranian Revolutionary Guards threatened to block oil shipments through the Strait of Hormuz.
U.S. Crude oil fell 0.1 percent to $ 72.85 a barrel. Brent crude was down 0.25 percent at $ 77.20 a barrel.
Editing by Richard Borsuk