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Markets

Asian stocks plummet as Trump steps up China trade war

Nikkei index drops 500 points while regional benchmarks fall across board

A screen shows the Nikkei average plunging on Aug. 2. (Photo by Kai Fujii)

TOKYO -- Stock markets across Asia tumbled in early trading on Friday after U.S. President Donald Trump announced a fourth round of tariffs on Chinese goods.

Tokyo's Nikkei Stock Average was down more than 500 points, hovering at around 21,000. Foreign hedge funds among other investors rushed to sell due to concerns about the prolonged U.S.-China trade row.

Stocks that are especially susceptible to a global economic downturn, such as steelmakers and shipping companies, came under heavy pressure.

China's benchmark Shanghai Composite Index hit its lowest point since June 10 on Friday, starting at 2,861.33, down 47.43 points or 1.63% from Thursday. The index continued to fall, with the decline reaching nearly 2%.

Hong Kong stocks dropped across the board, with the Hang Seng starting at 26,950.53, down 615.17 points or 2.23% from Thursday.

Taiwan's Taiex opened at 10,641.28, down 90.47 points or 0.84%. Shares in contract manufacturers Taiwan Semiconductor Manufacturing Co. and Hon Hai Precision Industry took steep dives.

South Korea's Kospi index dipped below 2,000, losing 1.5% at one point to hit its lowest level since early January. The benchmark was also hurt by Japan's decision to revoke South Korea's preferential trade status.

Meanwhile, the yen strengthened rapidly against the dollar on Friday, hitting the 106-per-dollar mark for the first time since June 25. The yen had been in the lower 109 range against the greenback on Thursday, meaning it appreciated by nearly 2 in a single day.

Risk-averse investors are treating the Japanese currency as a safe haven as global headwinds gather. Mounting speculation about U.S. Federal Reserve interest rate cuts will likely create further upward pressure.

The Chinese yuan slid to its weakest level since November 2018, softening by over 0.7% to 6.95 per dollar in onshore trading. The yuan was at 6.97 per dollar in the offshore market.

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