TOKYO – Asian share markets sank again on April 4, deepening a global rout after US President Donald Trump’s tariff salvo fanned fears of a trade war and worldwide recession.
Singapore’s Straits Times Index tumbled almost 3 per cent, or 116.37 points, to close at 3,825.86. Deputy Prime Minister Gan Kim Yong said on April 3 the sweeping tariffs will have a significant impact on Singapore.
Japan’ stocks entered a bearmarket, with the Nikkei 225 index down 20 per cent from its peak in July. The index closed down 2.75 per cent for the day, making for a 9 per cent drop for the week.
Australia’s S&P/ASX 200 slid 2.4 per cent, while South Korea’s Kospi index lost 0.9 per cent.
Markets were closed on April 4 in China, Hong Kong and Taiwan for holidays.
In morning trading in Europe, France’s CAC index shed 1.8 per cent, Germany’s DAX fell 2.2 per cent and Britain’s FTSE index dropped 1.8 per cent.
In pre-market trading in the US, futures tied to the Dow Jones Industrial Average fell 387 points, or 1 per cent. S&P futures fell 0.7 per cent while Nasdaq futures were down 0.5 per cent.
This is after USstocksand the dollar on April 3 suffered their worst day in years after Mr Trump’s latest tariff measures sparked a global flight to haven assets.
The S&P 500 sank 4.9 per cent and the Nasdaq 100 plunged 5.5 per cent on April 3, the biggest drop since 2020 for each, wiping around US$2.5 trillion (S$3.3 trillion) from the US stock market.
A gauge of US small-caps, which are more sensitive to US growth, plunged 6.6 per cent in a sign investors believe the President’s trade offensive will stunt the American economy.
The USdollar wiped out all of its gains since Mr Trump won the presidency in November 2024, reigniting the debate about its haven reputation during challenging times, as the yen and Swiss franc surged.
The BloombergDollarSpot Index traded 0.4 per cent lower on April 4, after sliding 1.5 per cent the previous day.
Mr Ed Al-Hussainy, a strategist at Columbia Threadneedle Investment, said: “We may be at the very early stages of a structural sell-off in thedollar.”
Oil extended its plunge after diving more than 6 per cent overnight after the Organisation of the Petroleum Exporting Countries and its allies unexpectedly increased supply by three times the planned amount in May.
All in, the much-vaunted America-first trade – buying up assets that win when the US outperforms the rest of the world – is reversing on concern that the steepest increase in American tariffs in a century will hammer economic growth.
The scramble for havens drove a fierce rally in the prices of ultra-safe government bonds that provide a guaranteed income. That sent the yield on benchmark US Treasuries briefly below the closely watched 4 per cent level. Most other yields also tumbled as money markets priced in a 50 per cent chance of the Federal Reserve delivering four quarter-point rate reductions in 2025. Falling interest rates benefit bond prices.
“If these tariffs stick, the economy is going to slow down,” said Ms Mary Ann Bartels at Sanctuary Wealth. “Whether it is a recession or not, it is clear that the economy is headed for a slowdown in the US and around the world. There is no place to hide, but the fixed-income markets.”
The trading forms a volatile backdrop for the April 4 US jobs report and a speech by Fed chairman Jerome Powell, which should set the tone for markets worried about the outlook for the world’s largest economy.
Mr Trump has embraced tariffs as a tool to assert US power, revive manufacturing at home and extract geopolitical concessions.
Economists say the near-term result of his measures will likely be higher US prices and slower growth, or perhaps even a recession.
As spiralling tariff worries hammer USstocks, legendary investor Bill Gross is urging prospective dip-buyers to stay on the sidelines.
“Investors should not try to ‘catch a falling knife’,” he said in an e-mail. “This is an epic economic and market event similar to 1971 and the end of the gold standard, except with immediate negative consequences.”
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Recession fears
With Asia bearing the brunt of the new US tariffs, economists, including Goldman Sachs Group, cut their growth forecasts for countries in the region.
For the US, the world’s biggest economy, the chances of a recession have risen to 50 per cent or higher, Mr Jim Zelter said in a Bloomberg Television interview on April 3.
The risk that tariffs accelerate inflation and constrain the Fed’s ability to stimulate growth by slashing rates has also risen materially, he said.
“I have no doubt that over the near term, tariffs will be detrimental to growth,” said Ms Irene Tunkel at BCA Research.
“We have gone through the first stage of this calamity and, as I said before, this is bad for financial markets. The first stage is peak uncertainty. The next stage will be downgrades in earnings.”
Gold slipped from a fresh record high the previous day, but remained on track for a fifth straight weekly gain. Spotgoldwas down 0. per cent at US$3,086.32 an ounce. BLOOMBERG, REUTERS
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