U.S. President Donald Trump’s statement that tariffs would effectively apply to all nations stoked fears that a global trade war may trigger a recession, causing global equity markets to plummet and safe-haven gold to reach a new record high on Monday.
Tokyo’s main Nikkei index dropped on Friday, April 4, continuing the losses from the day before when US President Donald Trump’s massive new trade penalties sent Wall Street equities plunging.
The Nikkei 225 index had already dropped 2.77 percent on Thursday and was down 1.8% in early trading at 34,108.23. The overall Topic index was down 2.3% after dropping 3.08 percent the day before.
With increases in consumer staples, financials, commodities, ad energy stocks, the Dow and the benchmark S&P 500 on Wall Street recovered their early trading losses advended the day higher. The Nasdaq crashed.
“What the Trump administration has shown us so far is that you should not expect a consistent approach,” said George Lagarias, chief economist at Forvis Mazars.
“This is what scares the market the most. Inconsistency breeds uncertainty, and markets hate uncertainty.”
The likelihood of a U S. recession has increased from 20% to 35%, according to Goldman Sachs analysts, who predict that on April 2, Trump would impose tariffs of 15% on all U.S trading partners.
Gold prices continued their incredible rise, reaching a new high of $3,128.06. U.S gold futures increased 1.2% to close at $3150.30, while spot gold increased 1.31% to $3124.34 an ounce.
Amid the uncertainty surrounding tariffs, the dollar recovered from early losses to gain ground against the euro and the Japanese yen. The dollar gained 0.07% against the Japanese yen, reaching 149.93.
At $1.0815, the euro was down 0.11%. The dollar gained 0.48% against the Swiss franc, reaching 0.884 franc.
The dollar index, which compares the US dollar to a basket of currencies, such as the euro and the yen, increased by 0.17%.
Benchmark U.S 10-year note yields dropped 3.5 basis points to 4.221%. The benchmark German 10-year Bunds yield increased by 0.9 basis points to 2.738% in Europe.
Asia’s stock markets continue Wall Street’s losses
With the markets in China, Hong Kong, and Taiwan closed for the holiday, MSCI’s broadest index of Asia-Pacific stocks outside of Japan saw a 0.26 percent decline in little trading. At 9.15 am, the STI had decreased by 1.4%.
The tech-heavy Nasdaq Composite on Wall Street fell 6% on Thursday, and the S&P 500 saw its largest decline in a single day since 2020.
The stock exchanges in Paris and Frankfurt both ended the day down more than three percent in Europe.
Oil prices fell more than 6% due to worries that demand would be negatively impacted by an economic downturn brought on by Trump’s trade policies.
In addition to suffering severe losses against the yen. And British pound, the dollar fell as high as 2.6% against the euro, the largest intraday decline in ten years. The US currency recovered little from 145.99 yen in New York to 146.33 yen in early Asian trade on Friday.
