Asian shares dropped Friday, mirroring US equities, as concerns about the upcoming ‘reciprocal tariffs’ and a widening trade war overshadowed data showing the US economy grew faster than estimated.

A regional gauge of equities fell 0.8% with indexes in Japan and South Korea declining after both the S&P 500 and Nasdaq 100 slipped. Equity-index futures for US also inched lower in early Asian trading. Gold advanced after hitting a new record on demand for safe havens. Yields on the 10-year US Treasury fell slightly.

Markets were cautious ahead of President Donald Trump’s promise of announcing reciprocal tariffs on April 2, after slapping levies on imports of all automobiles into the country. Following data showing the US economy picked up pace in the fourth quarter, investors will now get another chance to gauge economic health on Friday when US personal consumption expenditures price index, or PCE, is unveiled.

“Stocks remain on the back foot as the latest tariff measures are digested and market participants nervously await next week’s announcement of reciprocal tariffs and tonight’s PCE Index data,” wrote Kyle Rodda, a senior market analyst at Capital.com. “The data tonight takes on greater importance because of the Trump administration’s trade policy.”

Trump, who has touted his April 2 announcement on tariffs as a ‘Liberation Day,’ escalated his trade war this week by slapping a 25% tariff on all cars not made in the US. Reciprocal duties that are set to be announced next week will be “very lenient,” the president said.

Just days before the end of a quarter that’s set to be the worst for the S&P 500 since 2023, investors will turn their focus to Friday’s US PCE data. The Federal Reserve’s preferred measure of underlying inflation is forecast to show signs of stickiness as prices remain at a disquieting level for officials.

“Investors will want to see in-line or better inflation results and a strong employment number to gain some reassurance,” said Bret Kenwell at eToro.

The 30-year US yield exceeded its five-year equivalent by the widest gap since early 2022, with shorter-maturity bonds more impacted by the prospect of potential Fed interest-rate cuts should US growth slow. The net result in the bond market is a so-called steeper curve.

Long-maturity Treasury yields reached the highest levels in a month Thursday as investors demanded compensation for the risk that tariffs will spur US inflation. Fed Bank of Boston President Susan Collins said tariffs will likely cause price pressures in the near term, but it was unclear how long that would last.

In Japan, inflation in Tokyo accelerated, keeping the Bank of Japan on track for gradual interest rate hikes. The yen temporarily gained against the dollar following the report, strengthening to as much as 150.77 against the greenback.

Elsewhere in Asia, a senior Chinese leader on Thursday called for increased global cooperation, in a thinly veiled critique aimed at the US for destabilizing trade and geopolitical relations. Facing external headwinds, policymakers have made boosting domestic demand the top economic priority this year.

“No matter how the external environment changes, China will open wider to the world,” Ding Xuexiang, the ruling Communist Party’s sixth-ranking official, said during his keynote speech at the annual Boao Forum.

Australian stocks reversed early declines and gained. The country will hold its national election on May 3, kicking off what’s expected to be a closely-fought campaign centered on cost-of-living pressures and a housing crisis in a sluggish economy.

In commodities, oil headed for a third weekly advance as the market braced for more tariffs from the Trump administration. Bullion gained as much as 0.2% on Friday to an all-time high of more than $3,061 an ounce.

Several major banks have raised their price targets for the precious metal, with Goldman Sachs Group Inc. this week ramping up its forecast to $3,300 an ounce by year-end.

Stocks

  • S&P 500 futures were little changed as of 9:47 a.m. Tokyo time

  • Hang Seng futures rose 0.7%

  • Japan’s Topix fell 1.8%

  • Australia’s S&P/ASX 200 rose 0.3%

  • Euro Stoxx 50 futures were little changed

Currencies

  • The Bloomberg Dollar Spot Index was little changed

  • The euro was little changed at $1.0791

  • The Japanese yen was little changed at 151.14 per dollar

  • The offshore yuan was little changed at 7.2706 per dollar

Cryptocurrencies

  • Bitcoin fell 0.1% to $87,186.43

  • Ether fell 0.3% to $2,000.4

Bonds

  • The yield on 10-year Treasuries declined one basis point to 4.35%

  • Australia’s 10-year yield declined three basis points to 4.48%

Commodities

  • West Texas Intermediate crude was little changed

  • Spot gold rose 0.2% to $3,062.23 an ounce

. Read more on Markets by NDTV Profit.A regional gauge of equities fell 0.8% with indexes in Japan and South Korea declining after both the S&P 500 and Nasdaq 100 slipped.  Read MoreMarkets, Business, Bloomberg 

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