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Asian markets declined on Wednesday following the sacking of U.S. Secretary of State Rex Tillerson and amid talk of potential U.S. tariffs against China.
The Nikkei 225 fell 0.84 percent, or 185.30 points. The broader Topix slipped 0.42 percent, with most sectors trading in negative territory. Of note, the Topix iron and steel index firmed by 0.22 percent after edging lower in the last session.
Over in Seoul, the benchmark Kospi edged down by 0.41 percent. Automakers carved out gains that were offset by losses in other sectors, including downbeat manufacturing plays.
Technology names traded mixed, with Samsung SDI gaining 3.22 percent.
In Sydney, the ASX/S&P 200 lost 0.66 percent, with moderate gains in mining majors Rio Tinto and BHP unable to lift the broader index. Sector-wise, losses were broad-based, with all sectors except gold producers in the red.
Greater China markets traded lower. Hong Kong’s Hang Seng Index tumbled 1.24 percent as the heavily weighted financials and technology sectors logged losses.
Mainland markets remained under pressure despite the release of stronger-than-expected data, which saw industrial output and fixed asset investment topping forecasts. The Shanghai composite edged down by 0.39 percent and the smaller Shenzhen composite was off by 0.53 percent.
Overnight news that the Trump administration was looking into a tough trade package against China likely weighed on markets. The package could include indefinite tariffs and investment restrictions. Trump could impose tariffs on $60 billion of Chinese goods, Reuters reported, citing a source.
Those losses came on the back of declines on Wall Street seen after Secretary of State Rex Tillerson was fired by U.S. President Donald Trump on Tuesday. The dollar had also taken a hit following the news.
“Global risk appetite may continue to wane on the back of U.S. President Trump’s latest reshuffle to suddenly oust Tillerson,” OCBC Treasury Research analysts said in a note.
“The instability of the White House staff reinforced market uncertainty about Trump’s future policy moves, especially on trade.”
CIA Director Mike Pompeo will be taking on the role.
“[Tillerson’s] departure has left some worrying that it provides a green light to those in office pushing for more protectionist measures,” said ANZ Research analysts in an early morning note.
Stocks stateside had initially traded higher early in the session after the release of inflation data. Consumer prices rose 0.2 percent last month, meeting forecasts and easing concerns about tighter monetary policy due to inflationary pressures.
Meanwhile, data released on Wednesday showed Japan core machinery orders, a volatile metric, for January rose 8.2 percent on month and 2.9 percent on year, beating forecasts, Reuters reported. The Topix machinery index was down 0.85 percent, with Komatsu lower by 1.54 percent.
In corporate news, embattled commodities firm Noble Group on Wednesday announced a binding restructuring support agreement after requesting for a trading halt earlier in the day.
The dollar index, which tracks the greenback against a basket of six rivals, was softer at 89.602 at 11:35 a.m. HK/SIN. The dollar also eased against the yen to trade at 106.46 after rising as high as 106.74 earlier in the session.
While Bank of Japan policymakers thought it was appropriate for the central bank to “persistently pursue powerful monetary easing,” some members said it was important to monitor side effects of current policy, according to minutes of the BOJ’s January meeting.
The Australian dollar traded at $0.7870, firming from levels a round the $0.786 handle after the release of strong China data.
— CNBC’s Eamon Javers and Kevin Brueninger contributed to this report.