Asian stocks declined amid investor concern the exchange of threats between China and the U.S. is the precursor of a full-blown trade war. Oil dropped, while the dollar edged higher as Treasury yields steadied just above 2.90 percent.
The Topix index fell 0.8 percent as of 9:48 a.m. in Tokyo. Australia’s S&P/ASX 200 Index was little changed. Kospi index fell 0.2 percent. S&P 500 Index futures lost 0.4 percent. The MSCI Asia Pacific Index declined 0.5 percent.
Stocks fell in Japan as the yen advanced, while S&P 500 Index futures pointed to losses. South Korean equities also slipped , while they fluctuated in Australia. China and Hong Kong, markets more sensitive to deepening trade tensions, were closed for holidays. Oil extended a decline as Saudi Arabia and Russia prepared for a clash with other OPEC members and allies over whether to raise production. The pound ticked lower ahead of a parliament debate on the Brexit withdrawal bill.
Trade has been thrust back into the limelight, with investors concerned about the intensifying confrontation between the U.S. and China. China swiftly responded to President Donald Trump slapping tariffs on $50 billion of imports, putting an additional 25 percent levy on $34 billion of U.S. agricultural and auto exports starting July 6.
Meanwhile, OPEC meets in Vienna Friday to debate maintaining current oil output cuts. Iran said Venezuela and Iraq will join it in blocking a proposal to increase oil production that’s backed by Saudi Arabia and Russia when the cartel and its allies meet in Vienna.