Asian stock markets are in negative territory on Monday as the ongoing turmoil in Turkey and the fresh fall in the Turkish lira sparked concerns of contagion fears. Tensions between the U.S. and Turkey haven risen due to Turkish detention of U.S. pastor Andrew Brunson and as U.S. President Donald Trump announced that he has authorized the doubling on steel and aluminum tariffs on Turkey.
Asia share markets skidded and the euro hit one-year lows on Monday as a renewed rout in the Turkish lira infected the South African rand and drove demand for safe harbours, including the U.S. dollar, Swiss franc and yen.
The Japanese market is notably lower, tracking the weak cues from Wall Street and a stronger safe-haven yen amid the ongoing turmoil in Turkey; exporter stocks traded lower in the morning, with automakers and electric appliances taking a hit.
Chinese shares were also dented, with the Shanghai Composite and CSI 300 both losing upwards of 1.25%. Hong Kong's Hang Seng Index, meanwhile, fell by as much as 1.5 percent as all sectors recorded steep declines. The falls in Australia were accentuated by mixed corporate earnings results.
Much of the early action was in currencies with the euro gapping lower as the Turkish lira took another slide to all-time lows around 7.2400. Against the U.S. dollar, the euro touched its lowest since July 2017 at $1.13700. The dollar eased against the safe haven yen to 110.21, but was a shade firmer against a basket of currencies at 96.431.
The Argentine peso and South African rand were also caught in the crossfire, with the dollar adding 5 percent on the rand. Dealers said Japanese retail investors had been squeezed out of long positions in the rand sending the yen steaming higher. In commodity markets, gold found little in the way of safety flows and was last down at $1,208.21 an ounce.
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