Asian equities extend losses on eve of US tariff deadline

TOKYO — Asian stocks fell for the fourth day and major currencies traded in tight ranges on Thursday, with financial markets jittery before a US deadline to impose tariffs on Chinese imports just a day away.

Spreadbetters expected European stocks to open little changed, with Britain’s FTSE flat, Germany’s DAX 0.02% lower and France’s CAC down 0.10%.

MSCI’s broadest index of AsiaPacific shares outside Japan, which has been drifting lower since Monday, was down 0.50%. The index has lost about 2% this week, during which it plumbed a nine-month low.

S& P 500 futures edged up 0.10% while Dow futures lost 0.10%, pointing to a mixed start for Wall Street later in the day when trading resumes following Wednesday’s Independence Day holiday.

Japan’s Nikkei lost one percent, South Korea’s KOSPI slipped 0.75%, Hong Kong’s Hang Seng was off 0.90% and the Shanghai Composite Index fell 0.90%.

“The markets lack strong direction without incentives from the United States, where their markets were closed yesterday. Moves by Chinese shares and the yuan remain a key factor in the meantime,” said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management in Tokyo.

The US plans to implement tariffs on $ 50 billion worth of imports from China as both nations remained locked in a bitter trade dispute that has convulsed global financial markets in recent weeks.

On July 6, tariffs on $34 billion worth of imports will take effect, and Beijing has promised to retaliate in kind.

However, China’s finance ministry did say on Wednesday that it will “absolutely not” fire the first shot in a trade war with the US and will not be the first to levy tariffs.

China has put pressure on the European Union to issue a strong joint statement against US President Donald Trump’s trade policies, European officials told Reuters.

“The $34 billion US tariffs figure has been mostly factored by the markets and focus is now on what the United States says on the remaining $ 16 billion,” Mr. Ichikawa said.

In currencies, the euro was little changed at $ 1.1655. The single currency fell to as low as $ 1.1630 overnight after weaker confidence in the euro zone overshadowed better-than-expected data on business activity.

The Chinese yuan was slightly lower, its recovery from an 11- month low stalling. A rebound in the yuan was triggered in the past two sessions after the central bank sought to calm nervous markets midweek and stem the currency’s tumble. —