Asian Markets Decline as Investors Face Uncertainty Ahead of US Jobs Report

Asian markets mostly traded lower on Friday, with Tokyo’s benchmark index dropping over 2% following a downturn on Wall Street, as global economic uncertainties and trade policy concerns weighed on investor sentiment.

Meanwhile, US futures and oil prices showed an upward trend, indicating a possible recovery ahead of crucial economic data releases.

Bitcoin was hovering around $88,266, reflecting a 3.4% decline, according to CoinDesk. This came after former President Donald Trump signed an executive order on Thursday to establish a government reserve of Bitcoin—an important step towards its potential mainstream adoption. The move is seen as a strategic effort to regulate and integrate the cryptocurrency into the US financial system, though it remains a contentious topic among lawmakers and market analysts.

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China’s Trade Data Disappoints

China's trade figures for January and February fell short of expectations, with exports rising by only 2.3% while imports plunged 8.4%, as per government data. The decline in imports signals weakening domestic demand, raising concerns about the country’s economic recovery. The Chinese government traditionally combines trade statistics for the first two months of the year to adjust for seasonal distortions caused by the Lunar New Year holiday.

The lower-than-expected trade performance suggests that external demand for Chinese goods may be slowing, potentially due to sluggish global economic conditions and the ongoing geopolitical tensions affecting supply chains. Investors are closely watching how Beijing responds, particularly regarding potential stimulus measures aimed at boosting domestic consumption.

Wall Street Reacts to Trade Policy Shifts

On Wall Street, stocks dipped after Trump provided a temporary extension on his 25% tariffs on numerous imports from Mexico and Canada, reinforcing the uncertainty surrounding these trade policies. Unlike the market boost seen the day before—when Trump announced a one-month exemption for automakers—investors reacted with little enthusiasm.

The uncertainty surrounding tariffs has made it difficult for businesses to plan long-term investments, with supply chains experiencing disruptions. US manufacturers, particularly in the auto and electronics industries, have voiced concerns over the potential impact of sudden trade policy changes, citing increased costs and reduced competitiveness.

Asian Market Performance

In Tokyo, the Nikkei 225 index slumped 2.2% to 36,887.17, driven by heavy selling in technology-related stocks. Tokyo Electron, a major chipmaker, saw its shares fall 3.1%, while testing equipment manufacturer Advantest declined 2.3%, mirroring sharp losses in their US-listed counterparts overnight.

Hong Kong’s Hang Seng index, which initially gained, reversed course to slip 0.7% to 24,204.97. Similarly, the Shanghai Composite Index lost 0.3%, settling at 3,372.55.

Australia’s S&P/ASX 200 index dropped 1.8% to 7,948.20, while South Korea’s Kospi slid 0.5% to 2,563.48 after the country’s top court ruled to release impeached President Yoon Suk Yeol from jail—more than a month after he was arrested and charged over his brief imposition of martial law.

Taiwan’s Taiex index fell 0.6%.

In India, the Sensex remained largely unchanged, while Thailand’s SET index in Bangkok edged up 0.3%.

Tech and AI Stocks Lead Losses

On Thursday, the S&P 500 sank 1.8% to 5,738.52, resuming its downward trend after a modest recovery the previous day. The Dow Jones Industrial Average lost 1% to close at 42,579.08, while the Nasdaq Composite dropped 2.6% to 18,069.26—marking a decline of over 10% from its record high set in December.

Losses were led by semiconductor firms and their suppliers, which had previously surged amid the artificial intelligence boom. Nvidia shares tumbled 5.7%, while Broadcom slid 6.3% ahead of its earnings report release. The selloff in AI-related stocks suggests that investors are reassessing valuations amid growing concerns over a potential slowdown in demand for high-end computing chips.

Economic Outlook and Labour Market

Investors are now awaiting a key report from the US Labour Department, scheduled for release on Friday, which will detail February’s employment numbers. A resilient job market, alongside strong consumer spending, has so far played a critical role in preventing a recession. Analysts anticipate an increase in hiring for the month, with economists projecting that the US economy added over 200,000 jobs in February.

A strong labour market could provide the Federal Reserve with more room to maintain its current monetary policy stance. However, rising wages and inflationary pressures could complicate the Fed’s decision-making process regarding future interest rate adjustments.

Global markets remain under pressure as investors assess economic data, geopolitical risks, and monetary policy decisions. While the outlook for the US job market appears strong, uncertainty surrounding trade policies, inflation, and interest rates continues to influence market sentiment. As traders brace for upcoming data releases and potential policy shifts, volatility is likely to persist across global stock and currency markets.