Asian stocks on edge ahead of deadline for US tariffs on Chinese imports

On Thursday, President Trump confirmed that the US would begin collecting tariffs on $34 bn worth of Chinese imports at 12:01 am Washington time on Friday

Asian share markets were set for a bumpy ride on Friday just hours ahead of a US deadline to impose tariffs on Chinese imports, which has rattled financial markets in recent weeks as investors feared it could trigger a full-blown global trade war.  

On Thursday, US President Donald Trump confirmed that the United States would begin collecting tariffs on $34 billion worth of Chinese imports at 12:01 am Washington time (0401 GMT) on Friday, and warned that subsequent rounds could see tariffs imposed on more than $500 billion worth of goods. 
 

"The risk that further escalation derails growth is keeping some investors cautious," ANZ analysts said in a note Friday.

The Sino-US trade dispute has roiled financial markets including stocks, currencies and the global trade of commodities from soybeans to coal over the past several weeks.

Overnight gains in European and US equities, however, provided some comfort for the start of Asian trading. MSCI's broadest index of Asia-Pacific shares outside Japan inched up 0.05 per cent, with some support from early gains in Korean and Australian shares.

Japan's Nikkei stock index was 1.1 per cent higher after closing at a three-month low on Thursday, while Australian shares gained 0.2 per cent. Seoul's Kospi index edged up 0.2 per cent.

In Thursday's Wall Street session, the Dow Jones Industrial Average rose 0.75 per cent, the S&P 500 0.86 per cent and the Nasdaq Composite 1.12 per cent.

US and European shares were boosted by reassuring economic data from Germany, and as automakers' shares jumped, with German Chancellor Angela Merkel saying she would back lowering European Union tariffs on US car imports after Washington offered to scrap threatened tariffs on European cars.
 

But newly released minutes from the US Federal Reserve's last policy meeting on June 12-13 showed policymakers discussed whether recession lurked around the corner, and expressed concerns global trade tensions could hit an economy that by most measures looked strong.

The yield on benchmark 10-year Treasury notes was at 2.8364 per cent. The two-year yield, which rises with traders' expectations of higher Fed fund rates, touched 2.5527 per cent compared with a US close of 2.561 per cent.

Gold, which is sensitive to rising interest rates, was flat. Spot gold

The dollar fell slightly against the yen, dropping 0.1 per cent to 110.54 .

The single currency was up a hair on the day at $1.1694, while the dollar index, which tracks the greenback against a basket of six major rivals, turned down 0.1 per cent to 94.365.

Oil prices ticked up after falling on US government data that showed an unexpected jump in crude oil stockpiles.
 

US crude rose 0.2 per cent at $73.08 a barrel. Brent crude was also 0.2 per cent higher at $77.52 per barrel.