Asian Markets Open on a Tailspin on Monday with Japan, Korea Leading a Wild Sell-off Caused by Washington’s ‘Reciprocal Tariffs’ Policy

By Global Times

Apr 07, 2025 09:38 AM

Asian markets kicked off the week with a sharp downturn on Monday amid growing jitters over escalating US protectionist tariffs and the ripple effects the tariffs caused all around the world.

Japanese markets led losses in the region in early trade. The benchmark Nikkei 225 plunged 8.03 percent—its weakest level since October 2023—while the Topix Financial Index tumbled more than 12 percent in a sector-wide sell-off.

South Korea's Kospi 200 index futures plummeted 6.8 percent, triggering a temporary halt on program-driven sell orders. At 9:12 am local times, automated selling was suspended for five minutes. The benchmark Kospi index plunged more than 4.7 percent during the session.

Trading in Nikkei 225 and Topix index futures was temporarily halted in early session as frenzied selling triggered circuit breakers.

After a holiday-shortened trading week, TSMC and Foxconn shares tumbled nearly 10 percent at Monday's market open in Taipei, triggering circuit breakers. Goldman Sachs downgraded Taiwan stocks to "underweight" due to their significant exposure to the US market.

The immediate trigger was the US government's April 2 announcement of so-called reciprocal tariffs on all trading partners, a move criticized as destabilizing the rules-based global trade system.

Meanwhile, Australia's S&P/ASX 200 index plunged more than 6 percent, extending its decline to over 15 percent from February's peak. This puts the benchmark index within 5 percentage points of entering technical bear market territory.

The impact of US tariff policies continues to reverberate across global financial markets, with US stock index futures, crude oil, cryptocurrencies, and precious metals all plunging further during Monday's early Asian trading session.

After last week's nearly 10 percent drop in US equities, Nasdaq 100 futures tumbled more than 5 percent at the open, while S&P 500 futures slumped over 4 percent. 

Also, crude oil extended its sell-off, with WTI futures breaking below $60/barrel for the first time since April 2021, down 4 percent on the day.

In US after-hours trading, major tech stocks suffered big losses, with Apple dropping 5.5 percent, Tesla plunging 10 percent, Nvidia tumbling 9 percent. 

Meanwhile, the yield on the benchmark 2-year US Treasury note fell to 3.445 percent, hitting its lowest level since September 2022 as investors sought safer assets amid the market selloff.

Amid widespread opposition, US President Donald Trump announced a sweeping "reciprocal" tariff policy on Wednesday, setting a baseline tariff of 10 percent on all imported goods, with higher tariffs on many countries and regions. The move has rattled Wall Street last week, sparking fears of a global trade war and a risk-off mood.

The International Monetary Fund (IMF) projects global economic growth to hold steady at 3.3 percent in 2025, though officials cautioned that escalating trade tensions could force downward revisions and amplify worldwide uncertainties.

Global Times