Hong Kong — Asian markets mostly fell Thursday, July 19, as the US Federal Reserve chief’s upbeat assessment of the economy failed to allay concerns about a global trade war.
In his second day of congressional testimony on Wednesday, Federal Reserve Chairman Jerome Powell expressed optimism over the US economy.
But he warned that the spiralling global trade row was having a negative impact on companies in the US.
“We hear from our extensive network of business contacts a rising chorus of concerns,” he said.
US President Donald Trump has imposed steep tariffs on products from China worth tens of billions of dollars, and has threatened to target hundreds of billions more, on top of import taxes on steel and aluminium that have angered allies such as the EU.
“Powell was pretty straightforward on the risks from the trade policy uncertainty though he tried to stay out of the political debate,” said Greg McKenna, chief market strategist at AxiTrader.
The Fed chief said US businesses were already being hurt by reciprocal tariffs on key products, pointing out: “The bottom line is a more protectionist economy is less competitive, less productive.”
However, he also said that if Trump’s trade policy resulted in lower tariffs, that would be good for the US economy.
Hong Kong closed down 0.4% while Shanghai was 0.5% lower. Seoul fell 0.3% and Tokyo edged down 0.1 percent, snapping a four-day winning streak.
“Profit-taking emerged after four days of gains,” said Hikaru Sato, senior technical analyst at Daiwa Securities.
“But the decline was limited due to a weak yen and gains in US shares,” Sato told AFP.
Sydney gained 0.3% while Singapore rose one percent.
In a sign of worsening tensions over the trade dispute, a senior economic adviser to Trump attacked Chinese President Xi Jinping for blocking an agreement to resolve the issue.
“I think Xi is holding the game up,” said Larry Kudlow, director of the White House National Economic Council. “I don’t think President Xi has any intention of following through on the discussions we’ve made.” — AFP