Global stocks took another beating while investors piled on to safe-haven assets after U.S. President Donald Trump said he would slap a 10% tariff on the remaining $300 billion of Chinese imports from next month.
MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.51% to its lowest level since mid-June while Japan's Nikkei tumbled 1.91%.
Trump’s move breaks a truce in the trade war struck in June and could further disrupt global supply chains.
China’s state media quickly denounced the move, with the editor in chief of the Global Times saying on Friday that a trade deal between the United States and China was now “further away.”
The new tariffs would hit a wide swathe of consumer goods from cell phones and laptop computers to toys and footwear, at a time when the manufacturing sector is already reeling from the accumulative impact of the trade war.
The proposed levies triggered a stampede for safe-haven assets, including U.S. bonds, the yen and gold while the yuan and the Australian dollar hit multi-month lows.
Gold held firm at $1,438.9 per ounce, down 0.4% in Asia after having risen 2.4% on Thursday, staying near a six-year high of $1,453 touched two weeks ago.
The yen edged up to 107.25 on the dollar after rising 1.3% overnight, its biggest daily gain in more than two years.
The euro also recovered to $1.1090, from a two-year low of $1.1027 hit in U.S. trade.
Australian dollar dropped to a seven-month low of $0.6795.
Offshore yuan hit a nine-month low of 6.9731 to the dollar.
The 10-year U.S. bond yield fell almost 12 basis points on Thursday to 1.902%, hitting the lowest level since Nov. 8, 2016, when Trump won a surprise victory in the presidential election.
Oil prices bounced back a tad after suffering sharp falls the previous day. Brent crude rose 1.2% to $61.56 per barrel, after having fallen 7.0% on Thursday, its biggest daily percentage drop since February 2016. U.S. West Texas Intermediate crude rose 1.1% to $54.75, having shed 7.9% on Thursday.
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