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Asian Markets Fall; U.S. Tariffs, China PMI In Focus

Asian markets fell in morning trade - Asian markets fell in morning trade on Friday on reports that U.S. President Donald Trump is considering plans to impose tariffs on $200 billion in Chinese imports as soon as next week. China’s PMI was also in focus as it unexpectedly rose in August.

Citing six people familiar with the matter, Bloomberg reported that Trump wants to move ahead with a plan to impose the tariffs as soon as a public-comment period concludes next week. The report came after the U.S. and China imposed tariffs on $16 billion worth of goods on each other. The two countries also slapped each other with a $34 billion worth of imports in July.

The news was cited as headwind for equities, as China’s Shanghai Composite and the Shenzhen Component fell 0.9% and 1.0% respectively by 10:00PM ET (02:00 GMT). Hong Kong’s Hang Seng Index also dropped 1.5%.

Tencent Holdings Ltd (HK:0700)’s shares fell as much as 5% on reports that China’s regulators are planning to restrict the number of new online games and the total number of titles.

Meanwhile, official data showed on Friday that growth in China’s manufacturing sector unexpectedly rose in August as the official Purchasing Managers’ Index (PMI) rose to 51.3. Analysts previously expected the number to drop to 51.0 from July’s 51.2.

A reading above 50 indicates expansion, while a reading below that signals contraction.

The official PMI focuses on large, state-owned companies while another set of private manufacturing PMI readings, due Monday, focuses on small and medium-sized enterprises.

Elsewhere, Japan’s Nikkei 225 slipped 0.2% as data revealed the country’s unemployment rate rose to 2.5% in July, compared with the median forecast of 2.4%.

South Korea’s KOSPI was little changed at 2306.3 after the Bank of Korea left its base rate unchanged at 1.5% for a sixth straight monetary policy meeting

"Growth slowdown concerns would outweigh capital outflow concerns, dissuading the BOK from hiking rates at this meeting," Ma Tieying, an economist at DBS said before the rate decision.

"Although the Turkey crisis has weighed on emerging market assets, the won still outperformed, thanks to Korea’s relatively strong fundamentals."

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