President Donald Trump said last week the U.S. is putting 10% tariffs on another $300 billion worth of Chinese goods starting Sept. 1.
In Japan, the Nikkei 225 plunged 2.61% in early trade, as shares of index heavyweight and robot maker Fanuc declined 3.69%. The Topix index also fell nearly 2.4%.
South Korea’s Kospi dropped 1.6%, as chipmaker SK Hynix saw its stock drop 2.92%. Australia’s S&P/ASX 200 slipped 2.48%.
The MSCI Asia ex-Japan index declined 0.76%.
The Tuesday session in Asia followed overnight declines on Wall Street, where the Dow Jones Industrial Average plunged more than 700 points, the S&P 500 dropped nearly 3% and the Nasdaq Composite fell 3.5%. It was the worst percentage drop for all three indexes this year.
Investors will be closely watching for where the People’s Bank of China sets its midpoint for the onshore yuan today.
The Chinese central bank sets a daily rate for the currency, allowing it to trade in a band against the greenback within 2% of the midpoint value, also known as the onshore yuan. Its offshore counterpart is used by foreign investors and banks.
“The (midpoint) fix is likely to be below 7.0900,” Richard Grace, chief currency strategist and head of international economics at Commonwealth Bank of Australia, wrote in a morning note.
The offshore yuan was last at 7.1268 against the greenback.
On Monday, the onshore Chinese currency weakened past the psychologically important 7-yuan-per-dollar threshold for the first time since 2008. Following that, the U.S. Treasury Department designated China as currency manipulator — a move that no White House had exercised since the Clinton administration.
The Japanese yen, widely viewed as a safe-haven currency, traded at 105.70 after strengthening from levels above 106 in the previous session. The Australian dollar changed hands at $0.6770 after falling from levels above $0.678 yesterday.
Elsewhere, shares of Apple suppliers will also be in focus, with the Cupertino-based tech giant seeing its stock drop 5.2% on Monday amid the trade turmoil.
U.S. futures on Monday evening also pointed to further declines for stocks on Wall Street when they open later Tuesday, with the Dow implied to open lower by more than 400 points.
Asia-Pacific Market Indexes Chart
|NIKKEI||Nikkei 225 Index||NIKKEI||20202.58||-517.71||-2.50|
|HSI||Hang Seng Index||HSI||26151.32||0.00||0.00|
|ASX 200||S&P/ASX 200||ASX 200||6474.10||-166.20||-2.50|
|CNBC 100||CNBC 100 ASIA IDX||CNBC 100||7598.39||-110.08||-1.43|
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