Asian stocks declined on Friday as the outlook for U.S. interest rates remained uncertain and the Trump administration announced a new round of tariff measures, including 100 percent duties on imported branded drugs, 25 percent tariffs on heavy-duty trucks and 50 percent tariffs on kitchen cabinets. All new duties will take effect on October 1.
Following stronger-than-expected economic data released overnight, investors also waited key U.S. inflation readings later in the day for more clues on the outlook for rates.
Chinese markets ended notably lower, with the benchmark Shanghai Composite Index closing down 0.7 percent at 3,828.11 after the S&P 500 dropped for a third straight session overnight, marking the longest slide in a month. Hong Kong's Hang Seng Index tumbled 1.4 percent to 26,128.20 on valuation and tariff jitters.
Japanese markets ended sharply lower, with pharma and chip-related shares pacing the declines. Data showed consumer prices in Tokyo grew less than expected in September, but analysts said the chance of a rate hike in October cannot be ruled out.
The Nikkei 225 Index slid 0.9 percent to 45,354.99, but the broader Topix Index finished marginally higher at 3,187.02, reaching a record closing high.
Sumitomo Pharma and Chugai Pharmaceutical fell 3-5 percent, while Lasertec and Sumco both plunged around 8 percent.
Seoul stocks tumbled on escalating concerns over protracted tariff negotiations with the United States and due to profit taking ahead of the Chuseok holiday.
The Kospi plummeted 2.5 percent to 3,386.05, falling below the 3,400 level for the first time in 10 trading days. Pharma stocks led losses, with SK Biopharmaceuticals falling 3.5 percent.
Australian markets ended slightly higher as strong copper prices boosted mining stocks, helping offset losses in the healthcare sector, with biotechnology firm CSL ending 1.9 percent lower.
The benchmark S&P/ASX 200 Index edged up by 0.2 percent to 8,787.70, while the broader All Ordinaries Index closed up 0.2 percent at 9,079.20.
Across the Tasman, New Zealand's benchmark S&P/NZX-50 Index slipped 0.3 percent to 13,111.73, marking its second straight session of losses.
The dollar rally lost steam in Asian trading, as focus shifted to the release of the Personal Consumption Expenditures (PCE) Price Index data, the Federal Reserve's preferred gauge of inflation, for August later in the day.
Gold held steady below $3,750 per ounce, while oil prices edged up slightly and were on track for their sharpest weekly rise since early June, when Israel launched a missile strike on Iran.
Overnight, U.S. stocks fell for a third straight session as hopes for aggressive Fed rate cuts faded and concerns prevailed about the outlook for the artificial intelligence trade.
Strong economic data, including an unexpected drop in jobless claims, a sharp upgrade in Q2 GDP growth and a rebound in demand for U.S. durable goods after two months of declines, helped limit overall losses to some extent.
The tech-heavy Nasdaq Composite and the S&P 500 both fell by half a percent, while the Dow gave up 0.4 percent.
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December 26, 2025 08:42 ET Third quarter economic growth data from some major economies including the U.S. were the main news in this holiday shortened week. GDP growth and industrial production data from the U.S. helped to boost morale, while the consumer confidence survey results were less upbeat. In Europe, the quarterly economic growth data from the U.K. drew attention, while the minutes of the Australian central bank’s latest policy session was in focus in Asia.