Nikkei 225 index was 1.9% lower at 40,324.17, the Shanghai Composite index declined 0.1% to 2,959.25, S&P/ASX 200 dropped 0.2% to 8,041.80, Kospi shed 1.4% to2,803.95 and Taiex declined 2.1%
Asian shares were mostly down Thursday, with Tokyo’s benchmark dropping more than 2%, after Wall Street’s record-breaking rally paused on concerns over potentially worsening trade tensions with China.
By early afternoon, Japan’s Nikkei 225 index was 1.9% lower at 40,324.17.
The markets’ spotlight was squarely on chip firms after a report from Bloomberg News said President Joe Biden is considering the most severe trade restrictions available if firms like the Netherlands’ ASML and Japan’s Tokyo Electron continue to ship advanced semiconductor technology to China.
The U.S. government has blocked Chinese access to advanced chips and the equipment to make them, citing security concerns.
Tech-related shares weighed on Tokyo trading. Tokyo Electron’s shares slumped 9.4% and chip equipment maker Advantest’s shares dipped 4.6%. Lasertec Corp. dropped 6.2%.
The strengthening yen also added to worries about exporter shares in Japan, as a weak yen is a boon for the country’s giant exporters such as Toyota Motor Corp.
The U.S. dollar advanced to 156.49 Japanese yen from 156.19 yen. It was trading above 161 yen most of last week but had dropped in recent sessions. The euro cost $1.0936, edging down from $1.0941.
The recent currency fluctuations are a result of U.S. politics taking “center stage,” as per Tan Jing Yi of Mizuho Bank. Former President Donald Trump has been expressing concerns about an overly strong dollar as a disadvantage for the U.S. since it makes American-made products relatively more expensive in overseas markets.
Elsewhere in Asia, Hong Kong was the exception, adding 0.3% to 17,776.73. The Shanghai Composite index declined 0.1% to 2,959.25.
Investors are awaiting word on policies to help boost China’s slowing economy as a top-level meeting of the ruling Communist Party wraps up in Beijing on Thursday.
Australia’s S&P/ASX 200 dropped 0.2% to 8,041.80. South Korea’s Kospi shed 1.4% to2,803.95.
Taiwan’s Taiex declined 2.1% as chip maker giant TSMC dipped 3.2% after dropping 8% overnight in U.S. trading.
Apart from concerns over further controls over sales of chips and equipment to China, Taiwan shares dropped after former President Donald Trump criticized the self-governed island claimed by Beijing, which the U.S. is obligated by treaty to defend if it is attacked.
Taiwan should pay us for defence, Trump said according to a transcript of an interview published by Bloomberg. Taiwan took our chip business from us, I mean, how stupid are we?, he said.
