TOKYO (Reuters) – Asian stocks extended a global decline on Tuesday, while the yen strengthened when US President Donald Trump threatened new tariffs on Chinese products in a growing trade war between the two biggest economies that have shaken up the financial markets.
Trump warned On Monday, Washington would impose a 10 percent tariff on $ 200 billion of Chinese goods after Beijing's decision to raise tariffs on $ 50 billion in US goods. Trump said that if China increases its tariffs again in response to the latest US measure, "we will comply with that measure by applying additional tariffs on another $ 200 billion of goods."
The retaliatory measures come after Trump said last week that he was moving forward with tariffs on $ 50 billion of Chinese imports.
Trade frictions have kept financial markets on edge, with investors increasingly worried that a full-blown trade dispute could derail global growth.
Futures of the S & P 500 ESc1 fell 0.6 percent, signaling another day of decline for Wall Street shares, which fell on Monday.
MSCI's broader index of Asia and the Pacific shares out of Japan. MIAPJ0000PUS fell 0.1 percent.
Nikkei .N225 of Japan lost 0.45 percent, South Korea KOSPI .KS11 declined 0.1 percent while Australian equities added 0.3 percent.
The dollar fell 0.45 percent to 110.06 yen JPY = following Trump's tariff comments. The yen is often sought in times of market turmoil and political tensions.
"Financial markets are trying to take a breather after last week, when there was a lot of news, but US-China trade remains a persistent issue, at least until US tariffs take effect early. of July, "said Masahiro Ichikawa. , senior strategist at Sumitomo Mitsui Asset Management in Tokyo.
"While commercial tensions are not a positive issue, the market has become accustomed to President Trump's comments, which appear to be negotiation tactics."
The euro rose 0.05 percent to $ 1.1631 EUR =. The Australian dollar AUD = D4, often seen as a proxy for business related to China, lost 0.25 percent to $ 0.7404.
In commodities, oil markets remained volatile before the OPEC meeting on Friday at a time when Russia and Saudi Arabia are pushing for higher production.
Brent LCOc1 futures were down 0.3 percent at $ 75.11 a barrel, after rebounding 2.5 percent overnight.
Editing by Shri Navaratnam