Asian shares fell on Monday in morning session, with Japanese equities heading for their biggest decline of 2019, as risk assets fell out of favour after a closely-watched signal of potential recession stateside appeared on Friday.
The Nikkei 225 in Japan fell 3.22% in early trade as shares of index heavyweights Fast Retailing, Softbank Group and Fanuc all declined. The Topix index also lost 2.76%.
Over in South Korea, the Kospi declined 1.59% as automaker Hyundai Motor saw its stock drop more than 3%. In Australia, the ASX 200 fell more than 1.22% in morning trade as almost all the sectors saw losses.
China’s Shanghai Composite Index was down 0.91%, while In Hong Kong the Hang Seng Index declined 1.67%.
Stocks in the US fell sharply on Friday as an inverted yield curve stoked fears that an economic recession is on the horizon. Disappointing economic data released Friday out of Europe, coupled with a downgraded economic outlook from the Federal Reserve, added to those concerns.
The spread between the 3-month Treasury bill and the 10-year note went negative on Friday for the first time in more than a decade. This is considered to be a signal that a recession may be coming soon.
Meanwhile, top US officials from Washington are set to visit Beijing later this week to resume trade negotiations with China. China and the US are expected to strike a deal sometime in April.
In currency news, the US dollar index, which tracks the greenback against a basket of its peers, was at 96.644 after bouncing from lows below 96.3 in the previous session.
The Japanese yen, widely viewed as a safe-haven currency, traded at 110.07 against the dollar after strengthening from lows above 110.6 last Friday. The Australian dollar changed hands at $0.7078 after seeing highs above $0.714 last week.
In commodities, oil prices slipped in the morning of Asian trading hours, with the international benchmark Brent crude futures contract shedding 0.31% to $66.82 per barrel. US crude futures also declined 0.51% to $58.74 per barrel.