Asia report: Markets down as China vents at Washington's 'slander'

The majority of Asian markets dropped on Thursday as US President Donald Trump's unique brand of diplomacy influenced proceedings in both China and Japan.

In Japan, the Nikkei 225 dropped by 0.99% to 23796.74 as the yen rose 0.02% against the dollar to JPY 112.75.

Former Japanese economy minister Akira Amari said in an interview on Thursday that US President Donald Trump is likely seeking a quick deal resolution with Japan after dropping out of the Trans-Pacific Partnership, though the scale of the talks is limited as Japanese Prime Minister Shinzo Abe would prefer that the US return to the partnership.

Japan has been excluded from US auto tariffs while negotiations are ongoing, with Trump understood to be keen for a deal to help US carmakers export to Japan despite a complete lack of demand for American cars in the country.

In China meanwhile, the Shanghai Composite was down 0.54% at 2,791.78 while the tech indicating Shenzhen Composite also tumbled, dropping 1.26% to 1,429.61.

Beijing’s spat with Washington continued to sour throughout the day, with defence ministry spokesman Ren Guoqiang voicing China’s opposition to US bomber patrols near Chinese waters.

At around the same time, foreign ministry spokesman Geng Shuang was in the process of rubbishing US President Trump’s accusation that Beijing is attempting to influence the US congressional elections in November because of his imposition of trade tariffs.

“We advise the United States to stop this unceasing criticism and slander of China,” Geng said at a briefing in Beijing, where he also called for the US to act in the interest of both country’s people.

The increasingly ugly tit-for-tat exchange between the two economic behemoths had a knock-on effect for other markets in the region.

South Korea’s Kospi was up 0.70% at 2,355.43 while Hong Kong’s Hang Seng Index dropped by 0.36% to 27,715.67 as Hong Kong commercial banks upped their benchmark lending rates for the first time in 12 years, increasing the cost of home mortgage repayments.

The big news out of South Korea was the indictment of Samsung’s board chairman on charges of illegally cracking down on a newly formed labour union in 2013.

Lee Sang-hoon is one of 28 people indicted from Samsung on similar charges according to prosecution official Kim Soo-hyun, who added that the move added credence to long-disputed claims that the electronics giant will not tolerate unions.

This is just the latest entry in a long running series of troubles with the law for Samsung, with vice chairman Jay Y. Lee receiving a suspended prison sentence for corruption earlier this year.

Oil prices were lower, with Brent crude last up 0.81% at $81.84 per barrel, and West Texas Intermediate rising 1.09% to $72.36.

In Australia, the S&P/ASX 200 was down 0.18% at 6,181.22 as reports from the country’s water bureau suggest that the drought that has ravaged eastern Australia is unlikely to be alleviated by seasonal spring rains.

Over in distant neighbour New Zealand, the S&P/NZX 50 dropped by 0.68% to 9,286.40.

The drop came amid government plans to charge tourists a NZ$35 levy with an aim to raise an extra NZ$80m per year in taxes, having played host to 4m tourists over the past year.

Both of the down under dollars were weaker on the US dollar, with the Aussie last behind 0.33% at AUD 1.3824, and the Kiwi down 0.25% to NZD 1.5053.