Asian Markets Retreat on Potential New US Trade Curbs Against China

Asian shares fell on Thursday as renewed concerns over U.S.–China trade tensions weighed on investor sentiment. Reports that Washington may impose fresh export restrictions on China triggered a broad retreat across regional markets, particularly in technology and semiconductor stocks.

According to news reports, the U.S. government is reportedly considering measures to tighten controls on the export of software and other advanced technology products to China. The potential move marks the latest escalation in the long-running trade and technology dispute between the world’s two largest economies.

Japan’s Nikkei 225 dropped about 1.5%, led by losses in chipmakers and electronics majors, while the broader MSCI Asia-Pacific ex-Japan index slipped 0.3%. Hong Kong’s Hang Seng Index fell 0.4%, and the Shanghai Composite also traded lower as investors turned cautious ahead of any official confirmation from Washington. South Korea’s Kospi and Taiwan’s Taiex, both heavily reliant on tech exports, also ended in the red.

The risk-off mood extended beyond equities. The U.S. dollar firmed slightly against major Asian currencies as investors sought safety, while the yield on the 10-year U.S. Treasury remained steady. Oil prices rose after the United States announced fresh sanctions on Russian energy companies, raising concerns over tighter global supplies.

Despite some better-than-expected earnings results from global firms, the broader tone in Asian markets remained subdued. Market participants also awaited key U.S. economic data, including inflation readings and updates on monetary policy, that could influence global fund flows in the coming weeks.

The renewed fears of trade restrictions come at a delicate time for Asian economies, which are already grappling with slowing export growth and volatile currency movements. Any escalation in U.S.–China tensions could further disrupt regional supply chains and dampen the near-term outlook for technology-driven markets.

With no immediate signs of policy clarity, investors are likely to remain cautious, keeping trading volumes muted and risk appetite restrained in the days ahead.