China Leads Asia Downward

Chinese stocks fell sharply Tuesday afternoon, as investors weighed a possible thawing of U.S.-China trade relations after U.S. President Joe Biden floated the idea of tariff cuts on Chinese goods.

In Japan, the Nikkei 225 lost 253.38 points, or 0.9%, to 26,748.14.

The Japanese yen traded at 127.43 per U.S. dollar, strengthening from levels around 127.9 earlier.

In Hong Kong, the Hang Seng Index dropped 357.06 points, or 1.8%, to 20,112.10.

Alibaba was down 2% while Tencent declined 2.48%.

Shares of electric vehicle maker Xpeng plummeted more than 9%, after it reported on Monday that its first-quarter net loss widened to 1.7 billion yuan ($254.7 million U.S.), from 786.6 million yuan a year earlier.

Japan’s manufacturing activity for May increased at the slowest pace in three months, as supply bottlenecks caused output to slow, according to Reuters.

In corporate news, Toyota Motor said Tuesday it will cut global production by around 100,000 to 850,000 in June, due to the semiconductor shortage. Shares of the Japanese automaker were down 0.56%.

The Australian dollar was at $0.7095, lifting from around $0.706 earlier.

CHINA

In Shanghai, the CSI 300 eased 94.83 points, or 2.3%, to 3,959.15.

Sentiment appeared to have gotten a boost after U.S. President Joe Biden said he was considering cutting U.S. tariffs on Chinese goods, at a press confidence during his trip in Japan as part of his first Asia tour.

As consumer prices heated up, the White House had said last month that it was looking at how those tariffs have contributed to inflation.

Those tariffs took effect in 2018 when the Trump administration imposed tariffs on billions of dollars worth of Chinese goods and Beijing retaliated with similar punitive measures, drawing both sides into a protracted trade war.

In other markets

In Taiwan, the Taiex fell 192.78 points, or 1.2%, to 15,963.63

In Korea, the Kospi index let go of 41.51 points, or 1.6%, to 2,605.87.
In Singapore, the Straits Times Index dipped 18.61 points, or 0.6%, to 3,195.04

In New Zealand, the NZX 50 descended 69.43 points, or 0.6%, to 11,247.03.

In Australia, the ASX 200 moved lower 20.06 points, or 0.3%, to 7,128.83.