Asian shares extended their losses Wednesday after U.S. President Donald Trump said a trade agreement China might have to hold until after the 2020 presidential polls, breaking hopes for a quick preliminary settlement.
Recent U.S. tariffs on Argentina and Brazil, in addition to threatened levies on French items, additionally darkened the mood, as a trade conflict that appeared to be winding down per week ago now seems like improving.
Investors turned to safe-havens, boosting bond prices and sending gold to a one-month high, while MSCI’s broadest index of Asia-Pacific shares outside Japan plunged 0.9%.
Japan’s Nikkei jumped 1.2%, matched by falls in Hong Kong and Korea, where stock markets hit their lowest since October.
Shanghai blue chips tanked 0.2%, and Australia’s S&P tumbled 1.7%, having shed nearly 4% since closing Monday.
The yield on benchmark U.S. 10-year treasuries dropped as low as 1.6930% overnight, the sharpest plunge since May. It stood at 1.7242% on Wednesday.
Trump had told reporters in London that there is “no deadline” for a settlement with China to end the tit-for-tat tariff row, which the International Monetary Fund (IMF) has mentioned will push global development to its slowest in 10 years.
U.S. Commerce Secretary Wilbur Ross stated if no substantial progress was made soon, another round of tariffs on Chinese imports along with cell phones, laptops and toys would take impact on December 15.
That stalls a rally that had pushed up the S&P 500 nearly 10% since early October when prime diplomats from China and the U.S. met and drafted an initial settlement that Trump mentioned he hoped could be sealed within weeks.