Asian shares were predominantly lower on Thursday, with Japan’s Nikkei 225 index falling by 2.4% at 40,126.35 as trade tensions between the United States and China heightened concerns among investors. Specific focus was on chip companies, with reports suggesting President Joe Biden could impose severe trade restrictions if companies continue to export advanced semiconductor technology to China. This news impacted tech-related shares, with Tokyo Electron, Advantest, and Lasertec Corp experiencing declines in their stock prices.
Additionally, the strengthening yen added to worries surrounding Japanese exporter shares, with a weaker yen typically benefiting large exporters like Toyota Motor Corp. The U.S. dollar slightly increased to 156.20 Japanese yen, while the euro saw a marginal decline to $1.0936. Market fluctuations were attributed to U.S. politics taking center stage, with former President Donald Trump expressing concerns about the strength of the dollar affecting American-made products overseas.
Japan recorded a trade surplus in June for the first time in three months, signaling a recovery in exports, while the country’s trade deficit for the first half of the year decreased significantly compared to the same period last year. Elsewhere in Asia, Hong Kong’s Hang Seng and Shanghai Composite index saw slight gains, while Australia’s S&P/ASX 200 and South Korea’s Kospi experienced declines. Taiwan’s Taiex also fell amid concerns over potential restrictions on chip sales to China and remarks by Trump regarding Taiwan’s defense obligations.
In the U.S., the Nasdaq composite witnessed a 2.8% decline led by losses in Big Tech companies like Nvidia, marking its worst drop since 2022. The S&P 500 and Dow Jones Industrial Average also saw decreases. The market observed a shift where more stocks were rising, signaling a more encouraging trend, although the smaller stocks in the Russell 2000 index saw a decline on Wednesday. Furthermore, ASML’s U.S.-traded shares dropped despite reporting strong spring sales figures. Energy trading saw an increase in benchmark U.S. crude and Brent crude prices.
