Asian stock markets declined Friday as investors weighed an unexpected move by the Trump administration as well as China-US trade tensions. US President Donald Trump on Thursday imposed a 5% tariff on imports from Mexico, which he said he will ratchet up unless Mexico halts the flow of illegal migrants into the US. Hong Kong, Shanghai and Tokyo exchanges fell, although some regional markets posted gains.
In Japan, the Nikkei 225 opened lower and fell further in the afternoon session, as investors mulled more trade talk from Trump and a rising yen, the latter regarded as a negative in export-oriented Japan. Also, manufacturing PMI’s from mainland China, a major trading partner, indicated a slowdown.
The benchmark Nikkei 225 fell 341.34, or 1.63%, to 20,601.19, as losing issues outnumbered gainers 204 to 17.
On the thin upside was e-commerce outfit Rakuten (RKUNY, 4755:Tokyo), up 1.98%, followed by Yahoo Japan (YAHOY, 4689:Tokyo), up 1.62%, and Odakyu Electric (ODERF, 9007:Tokyo, up 1.02%.
On the downside was chemical company Chiyoda (CHYCY, 6366:Tokyo), off 7.9%, and Mazda Motors (MZDAY, 7261:Tokyo), off 7.1%.
The Nikkei 225 is up 2.93% year-to-date.
In economic news, Japan industrial production rose 0.6% in April from March, reported officials.
Tokyo’s core consumer price (CPI) index, which excludes fresh food prices, rose 1.1% in May year-over-year, well below the Bank of Japan’s 2% annual inflation target.
The national unemployment rate decreased to 2.4% in April from 2.5% in March, and the jobs-to-applicants ratio was steady at 1.63.
Also, Japanese retail sales rose 0.5% in April from a year ago.
In Hong Kong, broad gauge Hang Seng fell 213.79, or 0.79%, to 26,901.09, as losing issues outnumbered gainers 31 to 15. Property issues fell and mainland China reported a softer economic outlook on declining manufacturing PMIs.
Leading the upside on a down day was Macau gaming house Sands China (1928:HK), up 1.9%, followed by old-line conglomerate CK Hutchinson (1:HK), up 1.4%, and then utility Hong Kong & China Gas (3:HK), up 1.41%.
On the downside was Wharf Real Estate (1997:HK), off 4.6%, and Sun Hung Kai Properties (16:HK), losing 4.3%.
The Hang Seng is up 4.08% year-to-date.
On the mainland, the Shanghai Composite fell 0.24% to 2,898.70.
In economic news, China’s official Purchasing Managers Index (PMI) for May dropped to 49.4 from April’s reading of 50.1. A PMI reading above 50 indicates expansion while a reading below 50 points to contraction.
On the other exchanges, the S. Korean Kospi inclined 0.14%; the Taiwan TWSE rose 1.11%; the Australian S&P/ASX 200 picked up 0.07%; the Singapore Straits Times Index lost 0.80%, and the Thai Set declined 0.08%. In late trading in Mumbai, the Sensex was off 0.30%.