Risk Aversion Returns! Asia-Pacific Stock Markets Plunge Collectively, US Dollar Hits 21-Month Low

As the trade war tensions between the world's two largest economies, China and the US, triggered risk-off sentiment, US stocks experienced another significant sell-off overnight, and Asian-Pacific markets were not spared either.

On Friday morning, Asian-Pacific markets generally declined, while the US dollar index briefly fell below the $100 mark, hitting a new low in nearly 21 months. Gold rose above $3,230 per ounce, continuing to set new highs.

Asian Markets Plunge Collectively

On Friday, following the overnight plunge in US stocks, Asian-Pacific markets collectively trended lower.

As of press time, Australia's S&P/ASX 200 index fell by 2.28%.

Japan's Nikkei 225 index dropped by 5.46%, and the TOPIX index fell by 5.05%. South Korea's KOSPI index declined by 1.55%, while the small-cap KOSDAQ index fell by 0.11%.

The Nikkei 225 index has cumulatively dropped by over 16% year-to-date.

On Wednesday Eastern Time, US President Trump made a sudden 180-degree turn in his stance on tariffs, announcing a suspension of new reciprocal tariff rates on imports from most countries. However, this shift seemed to only calm the markets for a day.

ANZ analysts wrote in a report: "Extending the timeline does not alleviate uncertainty... People remain skeptical about the outcome of trade negotiations, which will continue to impact investment and, consequently, growth prospects."

US Dollar Index Hits Nearly 21-Month Low

It is worth noting that, in addition to the stock markets, the US currency market was also impacted. On Friday morning Beijing time, the US dollar weakened across the board, with the US dollar index briefly falling below the 100 mark for the first time since July 2023. However, as of press time, the US dollar index has rebounded to 100.3.

US Dollar Index Falls Below $100 Mark

As of press time, the yen rose by 0.6% against the US dollar intraday. The euro rose by 0.76% against the US dollar.

Euro Rises Rapidly Against the US Dollar in Recent Days

Driven by risk-off sentiment, COMEX gold rose by 1.6% intraday to $3,231 per ounce, setting a new historical high.

On Friday Beijing time, US stock index futures remained highly volatile. As of press time, S&P 500 index futures rose by 0.3%, Nasdaq 100 index futures increased by approximately 0.1%, and futures linked to the Dow Jones Industrial Average rose by 28 points, a gain of nearly 0.1%.