Asian stock markets largely ended lower on Friday, as escalating trade tensions between the U.S. and China, mainly centered on China's rare earth export controls, dampened investor sentiment across the region.
The drop came after China publicly accused the US of stoking panic over the rare earth curbs and rejected calls to ease the restrictions.
Japanese stocks were hit hard, with the Nikkei 225 falling 1.4%, or 695.59 points, to end at 47,582.15.
Despite the broader market decline, Nintendo (TYO:7974) closed nearly 3% higher after disclosing plans to produce up to 25 million Switch 2 consoles by March 2026, aiming for strong first-year sales. Current fiscal-year sales are projected at about 20 million units.
However, engineering company IHI Corp. (TYO:7013) fell almost 3% after the company signed a contract with ICEYE to develop an Earth observation satellite constellation. IHI ordered four satellites, with an option for 20 more, aiming for a 24-satellite network by fiscal 2029. First launches are set for April 2026.
Chinese shares also saw significant losses with the Shanghai Composite Index, the main gauge of Chinese stocks, dropping 2% to 3,839.76. The Shenzhen Component Index fell 3.0% to 12,688.94.
China's commerce minister, Wang Wentao, blamed the fallout in trade relations with the US on restrictions set by Washington against Beijing after the talks in Madrid.
Daosheng Tianhe Materials Technology (Shanghai) or Techstorm (SHA:601026) surged 396% versus its initial public offering price of 5.98 yuan on the first day of trading on the Shanghai bourse.
In Hong Kong, the Hang Seng Index tumbled 641.41 points, or 2.5%, to 25,247.10, while the Hang Seng China Enterprises Index shed 247.49 points, or 2.7%, to 9,011.97.
BYD's (HKG:1211, SHE:002594) Hong Kong shares slipped over 4% after announcing a recall of more than 115,000 vehicles due to potential safety issues.
Meanwhile, Fujian Haixi Pharmaceuticals (HKG:2637) postponed its Hong Kong trading debut pending regulatory clearance.
South Korea's Korea Composite Stock Price Index or Kospi rose 0.52 points, or 0.01%, to end at 3,748.89. The Kosdaq decreased by 5.87 points, or 0.7%, to close at 859.54.
Samsung Electronics (KRX:005930) and Samsung C&T (KRX:028260) will jointly invest $110 million in California-based biotechnology company Grail, which specializes in early cancer detection through blood tests.
Shares of Samsung Electronics rose marginally, while Samsung C&T fell 3%.
In Singapore, shares closed lower, tracking regional losses as U.S. President Donald Trump doubled down on his stance towards a 100% tariff on China over Beijing's rare earth export controls.
The Straits Times Index (STI), a key benchmark for the Singapore Exchange, ranged between 4,311.65 and 4,348.62 throughout the day. It ended the session at 4,328.93, down 27.27 points or 0.6% compared to Friday's close.
Shares of PropNex (SGX:OYY) were down over 5% at the close after it said that certain claimants had discontinued and withdrawn a lawsuit against its subsidiary, PropNex Realty.
Singapore Land Group's (SGX:U06) shares were down nearly 3% as its indirect joint venture, United Venture Development (2022), secured a tender for a residential site at Dorset Road, Singapore, for SG$524.3 million.
Indian indices advanced for a third straight session, supported by sustained buying in banking shares and steady corporate earnings for the September quarter.
The BSE Sensex climbed 484.53 points, or 0.6%, to 83,952.19, while the NSE Nifty 50 added 124.55 points, or 0.5%, to 25,709.85.
Asian Paints (NSE:ASIANPAINT, BOM:500820) led the gainers with shares rising over 4%, followed by Mahindra & Mahindra (NSE:M&M, BOM:500520) and Bharti Airtel (NSE:BHARTIARTL, BOM:532454).