Asia markets still saw declines on Tuesday as the U.S.-China trade war intensified, after Beijing confirmed it is suspending agricultural product purchases in response to new American tariffs.
The Nikkei 225 in Japan dropped 134.98 points, or 0.7%, to 20.585.31
The Japanese yen, widely viewed as a safe-haven currency, traded at 106.34 to the U.S. dollar after seeing an earlier high of 105.51.
In Hong Kong, the Hang Seng Index unloaded another 175.08 points, or 0.7%, to 25,976.24.
The Australian dollar changed hands at $0.6788 after touching an earlier low of $0.6748, as the Reserve Bank of Australia on Tuesday announced that it was keeping rates at an all-time low of 1%.
CHINA
In Shanghai, the CSI 300 slid 39.36 points, or 1.1%, to 3,633.33.
President Donald Trump said last week the U.S. is putting 10% tariffs on another $300 billion worth of Chinese goods starting Sept. 1.
The Chinese Ministry of Commerce said Chinese companies have stopped purchasing American agricultural products in response to Trump’s latest salvo and added it would “not rule out” tariffs on newly purchased agricultural goods after Aug. 3. For its part, China is one of the largest buyers of U.S. agriculture.
In a closely-watched move, the People’s Bank of China set the midpoint for the yuan at 6.9683 per U.S. dollar.
The Chinese central bank sets a daily rate for the currency, allowing it to trade in a band against the greenback within 2% of the midpoint value, also known as the onshore yuan. Its offshore counterpart is used by foreign investors and banks.
The onshore yuan last traded at 7.0334 against the dollar, while the offshore yuan was last at 7.0721 against the greenback.
On Monday, the onshore Chinese currency weakened past the psychologically important seven-yuan-per-dollar threshold for the first time since 2008.
Amid the trade tensions, shares of Chinese rare earth producers mostly jumped on Tuesday.
JL Mag Rare-Earth soared 10% while Chengdu Galaxy Magnets jumped 9.98%. Shares of Jiangmen Kanhoo Industry, however, plunged 9.99%.
Beijing previously made a veiled threat about rare earth minerals that are crucial to the U.S. technology industry.
At present, China is the world’s largest producer of rare earths, a critical component in the manufacturing of products ranging from smartphones to electric vehicles.
Still, some analysts say China’s ability to use the material as leverage in its trade war with Washington is limited.
Shares of Lynas, the largest producer of rare earths outside of China, also jumped 7.87%.
In other markets
In Korea, the Kospi index faded 29.48 points, or 1.5%, to 1,917.50
In Singapore, the Straits Times Index let go of 24.04 points, or 0.8%, to 3,170.47
In Taiwan, the Taiex Index plummete 28.66 points, or 0.3%, to 10,394.75
In New Zealand, the NZX 50 plunged 178.86 points, or 1.7%, to 10,587.17
In Australia, the ASX 200 ditched 162.21 points, or 2.4%, to 6,478.09
