Most Asian stocks fell on Friday, extending recent losses as investors remained on edge over U.S. President Donald Trump’s tariff agenda. 

Japanese markets were by far the worst performers in the region, especially as hotter-than-expected inflation data from Tokyo ramped up bets on an early rate hike by the Bank of Japan.

Automobile and technology sectors clocked the biggest losses, with auto stocks still reeling from Trump’s announcement of 25% tariffs on the sector. Tech was dented by persistent losses in chipmakers, amid growing concerns of oversupply in the artificial intelligence data center industry. 

Regional markets took a weak lead-in from Wall Street, which fell for a second straight session on concerns over Trump’s tariffs. The U.S. The President is set to impose even more duties on April 2. 

U.S. stock index futures were muted in Asian trade, with focus turning to upcoming PCE price index data for more cues on U.S. inflation. 

Japanese stocks slide on hot CPI

Japan’s Nikkei 225 and TOPIX indexes were the worst performers in Asia on Friday, losing more than 2% each.

Losses in the two were driven chiefly by concerns over higher interest rates in the country, after Tokyo consumer price index inflation data read higher than expected for March, remaining above the BOJ’s 2% annual target.

This saw analysts begin factoring in a greater chance that the BOJ could raise rates by as soon as May, as it moves to curb inflationary pressures and wean the economy off monetary support. 

Asia stocks dip on auto, tech losses

Japanese stocks were also wallopped by persistent weakness in heavyweight auto stocks such as Toyota (NYSE:TM) Motor Corp (H:7203) and Honda Motor Co Ltd (TYO:7267). The country’s two biggest automakers slid nearly 5% each, extending steep losses from the prior session following Trump’s tariff announcement. 

Losses in major tech stocks also weighed.

South Korea’s KOSPI slid 1.7% on a similar trend, given that tech and chip stocks are among the heaviest on the index. Hyundai (OTC:HYMTF) Motor (KS:005380)- the world’s third-largest automaker by sales- slid 4.2%, while memory chip giant SK Hynix fell 3.5%. 

In Taiwan, TSMC (TW:2330)- the world’s biggest chipmaker- fell 0.9%, while electronics assembly giant Hon Hai Precision Industry Co Ltd (TW:2317) slid 3.4%. 

Tech stocks were slammed by growing questions over a supply glut in the AI data center industry- a key source of chip demand- after major investor Microsoft Corporation (NASDAQ:MSFT) was seen cancelling several data center leases. 

Broader Asian markets were less negative, with China’s Shanghai Shenzhen CSI 300 and Shanghai Composite indexes losing about 0.2% and 0.4%, respectively. Hong Kong’s Hang Seng index fell 0.3%, but was on track to recoup all of its losses from earlier in the week. 

Chinese stocks have vastly outpaced their peers so far in 2025 amid growing optimism over the country’s AI capabilities, as well as more stimulus from Beijing. Focus is now on purchasing managers index data for March, due on Monday, for more cues.

Australia’s ASX 200 rose 0.2% before a Reserve Bank of Australia meeting next week, where the central bank is widely expected to keep rates unchanged. 

Singapore’s Straits Times index rose 0.1% after hitting a series of record highs this week, while futures for India’s Nifty 50 index pointed to a flat open.