Shares fall, yen hits two month high as tariff worries weigh

By Ankur Banerjee and Chibuike Oguh

SINGAPORE/NEW YORK (Reuters) - Asian shares fell sharply on Thursday, tracking choppy trading on Wall Street and a dip in European stocks as U.S. President Donald Trump's tariff plans and a cautious stance from Federal Reserve policymakers hurt risk sentiment.

The risk-off mood lifted gold prices to a record high, while safe-haven currencies led by the Japanese yen also firmed on geopolitical worries. [GOL/] [FRX/]

Trump said on Tuesday that sector-wide tariffs on pharmaceuticals and semiconductor chips would start at "25% or higher," rising substantially over the course of a year. He intends to impose similar tariffs on autos as soon as April 2.

That along with other threats has exacerbated fears of a wide-ranging trade war, leaving investors jittery, although some analysts see the moves by Trump as a negotiation tool.

"In general the bias for markets remains upwards but if you look shorter term over the last few days, it's more mixed because the market tends to trade around the latest indications of the Trump administration," said Julian McManus, portfolio manager at Janus Henderson Investors.

"That tends to be unsettling and markets tend to trade off whenever they hear the word tariff because they think it means either risk for a particular country or they think inflation."

MSCI's broadest index of Asia-Pacific shares outside Japan fell 1% in early trading. Japan's Nikkei slid 1.4% on the strong yen.

Chinese stocks had a muted start to the session, with the blue-chip index down 0.4%. Hong Kong's Hang Seng Index slid 1.7%, having touched a four-month high earlier this week boosted by a blistering rally in tech stocks. (HK)

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