Asian equity markets sold off sharply Friday as escalating geopolitical tensions and fresh tariff threats from President Trump triggered broad risk-off sentiment across the region. Japan’s Nikkei plunged nearly 3 percent while South Korea’s KOSPI led losses with a decline exceeding 4.5 percent, significantly underperforming regional peers. The selloff comes as investors digest dual headwinds from renewed US-Iran conflict alongside Trump’s latest tariff announcements, both dampening appetite for risk assets. Traders across Asia are now reassessing exposure as the combination of trade policy uncertainty and Middle East tensions creates volatility heading into the weekend. The sharp moves in Korean equities suggest particular vulnerability in export-dependent markets facing both geopolitical and trade policy pressures. Broker desks report elevated hedging activity as institutional players reduce regional equity positions.
FXnCO Insight
Traders should monitor safe-haven flows into yen and treasuries while reassessing Asian equity allocations, particularly in export-heavy markets like South Korea that face compounded tariff and geopolitical risks.
Source: FXStreet