Asian markets have fallen sharply following a steep sell-off on Wall Street, with Japan’s Nikkei 225 index leading regional declines amid heightened concerns over global trade tensions and South Korea’s deepening political crisis.
The Nikkei 225 has fallen 2.8% to 33,763.64, compounding losses earlier in the session that saw it dip over 3%. The drop marks one of the index’s worst performances since the early stages of the pandemic in 2020.
In Australia, the S&P/ASX 200 closed 2.44% lower at 7,667.80, pushing the index into correction territory after an 11% decline from its peak in February.
In South Korea, the Kospi is down 1.22% at 2,456.45, while the Kosdaq index has edged 0.05% higher to 683.81, reversing earlier losses that followed the Constitutional Court’s decision to uphold the impeachment of President Yoon Suk Yeol. Yoon was removed from office after attempting to impose martial law in December. Prime Minister Han Duck-soo has resumed duties as acting president.
Market closures in China and Hong Kong for the Qingming Festival left trading activity thinner across the region.
The turmoil was triggered by President Trump’s announcement of reciprocal tariffs on more than 180 countries and territories, raising fears of a global trade war. The impact was immediate on US markets, where the Dow Jones Industrial Average plunged 1,679 points (3.98%), the S&P 500 fell 4.84% to 5,396.52, and the Nasdaq Composite slid nearly 6%, its largest drop since March 2020.
The US dollar has weakened, falling 2.7% against the yen and 3% against the Swiss franc, as investors seek refuge in safe-haven assets. Tariffs of up to 54% on some imported goods, including components in Apple’s Asian supply chains, have sparked concerns over higher consumer prices and potential supply disruptions.
With market expectations now leaning towards rate cuts totalling nearly 100 basis points this year, the Federal Reserve faces a difficult balance between taming inflation and addressing growing recession risks.
Investors are likely to monitor upcoming economic reports from Europe and the UK, along with any signals from Fed Chair Jerome Powell, for insight into how global central banks will respond to increasing economic and geopolitical pressure.
