Some Asian markets recovered in late-afternoon trade on Monday as news emerged that the United States agreed to exempt South Korea from steel tariffs.
The Nikkei 225 Index recovered 148.24 points, or 0.7%, to 20,766.10
The Hang Seng Index gained 239.48 points, or 0.8%, to 30,548.77
Major export stocks in the country finished mixed — Toyota shares rose 0.6%, Honda added 0.5% while Canon was up 0.2% Sony shares fell 0.3%.
A relatively weak yen is usually a positive for exporters because it increases their overseas profits when converted into the local currency.
Analysts at Singapore's DBS Bank said in a morning note that risk aversion is likely to persist in the markets amid the U.S.-China trade tensions.
In Australia, the heavily weighted financial sector was down 0.8%.
Major banking stocks in the country fell — shares of ANZ declined 0.7%, Commonwealth Bank was down 1.1% and the National Australia Bank dropped 0.7%. Westpac shares were down 0.6%
Reuters reported that the U.S. agreed to exempt South Korea from steel tariffs and instead would impose a quota on steel imports. In return, South Korea said it would improve access for U.S. carmakers under the bilateral trade agreement deal known as the U.S.-Korea Free Trade Agreement.
In the currency market, the dollar index traded around 89.333, falling from levels above 90 in the previous week.
Among currency majors, the Japanese yen traded at 105.1 to the dollar, weakening from an earlier high of 104.55.
The euro/yen pair traded at 130.1 while the Australian dollar/yen traded at 81.3. Elsewhere, the Australian dollar fetched $0.7736 and the euro traded at $1.2380.
CHINA
The CSI 300 dropped 25.05 points, or 0.6%, to 3,879.89
Beijing on Friday said it may target 128 U.S. products with an import value of $3 billion in response to President Donald Trump's executive order earlier this month that imposed broad duties on foreign aluminum and steel imports.
Trump had also announced tariff plans for up to $60 billion in Chinese imports, although China did not officially connect its Friday threats of retaliation to that White House action
On Saturday, some of the world's top economists and business leaders at the China Development Forum in Beijing warned about the risks of a trade war between the two economic powerhouses. Nobel-prize winning economists Robert Shiller and Joseph Stiglitz predicted pain ahead for the U.S. economy if Beijing and Washington ramp up tit-for-tat trade penalties.
In other markets
In Taiwan, the Taiex recouped 16.72 points, or 0.2%, to 10,840.05
In Korea, the Kospi regained 20.32 points, or 0.8%, to 2,437.08
In Singapore, the Straits Times Index fell 25.05 points, or 0.6%, to 3,412.46
In New Zealand, the NZX 50 lost 82.94 points, or 1%, to 8,432.41
The ASX 200 dropped 30.26 points, or 0.5%, to 5,790.47
