Asian markets saw broad losses on Tuesday, with Japanese stocks leading the declines after US President Donald Trump reaffirmed plans to impose tariffs on Mexico and Canada.
Investors also reacted to China’s decision to introduce additional tariffs on select US goods, adding to global trade tensions.
Japan leads losses; South Korea and Hong Kong mixed
Japan’s benchmark Nikkei 225 dropped 1.71%, while the broader Topix index declined 1.03%.
South Korea’s Kospi index traded flat in choppy conditions, while the small-cap Kosdaq fell 0.92%.
The country’s retail sales dropped 0.6% in January, reversing a 0.2% gain in December.
Hong Kong’s Hang Seng index dipped 0.18%, reflecting cautious investor sentiment ahead of China’s annual parliamentary session, known as the “Two Sessions.” Mainland China’s CSI 300 index slipped 0.17%.
China retaliates with fresh US tariffs
China’s Ministry of Finance and Ministry of Commerce announced new tariffs of up to 15% on select US goods starting March 10.
The measures primarily target American agricultural exports, including soybeans and corn.
Additionally, China will impose export restrictions on 15 US companies, including Leidos and General Dynamics Land Systems.
Australia and India join regional declines
Australia’s S&P/ASX 200 closed 0.58% lower at 8,198.10.
The country’s January retail sales rose 0.3%, in line with expectations, after a 0.1% decline in December.
India’s Nifty 50 dropped 0.25%, while the BSE Sensex lost 0.21%, tracking regional weakness.
Wall Street selloff weighs on sentiment
Overnight in the US, all three major indices fell after Trump reiterated that 25% tariffs on Mexico and Canada would take effect.
The S&P 500 slid 1.76% to 5,849.72, its worst session since December, bringing its year-to-date performance to a 0.5% decline.
The Dow Jones Industrial Average lost 649.67 points, or 1.48%, to 43,191.24, while the Nasdaq Composite tumbled 2.64% to 18,350.19, driven by an 8% drop in Nvidia shares.
South Korea’s factory output contracts
South Korea’s manufacturing sector showed signs of contraction, as the S&P Global Purchasing Managers’ Index (PMI) fell to 49.9 in February from 50.3 in January.
A reading below 50 signals contraction, marking the fourth such decline in six months.
Corporate movements: Seven & i, TSMC, and SoftBank face pressure
Shares of Japan’s Seven & i Holdings plunged as much as 9.34% following reports that the company plans to reject a takeover bid from Canadian retailer Alimentation Couche-Tard.
Taiwan Semiconductor Manufacturing Company (TSMC) saw its shares decline more than 2% after Trump announced the company would invest $100 billion in the US to expand chip production.
This investment brings TSMC’s total U.S. spending to $165 billion, aligning with Trump’s push to position the US as a global artificial intelligence hub.
Nvidia’s overnight stock drop also weighed on TSMC shares.
SoftBank Group shares fell as much as 5.81%, mirroring Nvidia’s decline.
The losses come after reports suggested CEO Masayoshi Son plans to borrow $16 billion to invest in AI, with potential additional borrowing of $8 billion in early 2026.
Japan’s labor market remains stable
Japan’s unemployment rate in January edged up to 2.5% from 2.4% in the previous month, slightly exceeding expectations.
The jobs-to-applicants ratio stood at 1.26, marginally above the 1.25 forecast.
With global trade tensions escalating and investor uncertainty rising, Asian markets are likely to remain under pressure in the coming sessions.
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