Asia markets set to decline as trade fears heat up

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Stocks in Asia were poised to decline on the first trading day of June amid ratcheting concerns over the state of global trade.

Futures pointed to a lower open in Japan, with the Nikkei futures contract in Chicago at 20,350, as compared to the benchmark Nikkei 225’s last close at 20,601.19.

Shares in Australia were also set to slip. The SPI futures contract was at 6,378.0, as compared to the ASX 200’s last close at 6,396.90.

Stocks on Wall Street took a dive last Friday, as the S&P 500 ended May down 6.6% as volatility spiked after trade talks fell apart with China and rhetoric on both sides worsened in May, while the Dow Jones Industrial Average notched its sixth straight weekly loss – the longest weekly losing streak for the Dow since 2011. The S&P 500 and Nasdaq Composite posted their fourth straight weekly loss. The major indexes also snapped a four-month winning streak.

The losses came as investors digested recent developments on U.S. trade policy, with U.S. President Donald Trump announcing Thursday that America would impose a 5% tariff on all Mexican imports from June 10 until illegal immigration across the southern border was stopped.

That announcement came amid a protracted trade dispute between the U.S. and China, with both sides having slapped billions of dollars of tariffs on each others goods as the conflict hits an impasse.

For its part, China has stood firm against the demands of the U.S., issuing a white paper on Sunday that shows a widening gap between both economic powerhouses.

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 97.750 after seeing highs above 98.1 last week.

The Japanese yen, often seen as a safe-haven currency, traded at 108.23 against the dollar after touching levels above 109.5 in the previous trading week. The Australian dollar changed hands at $0.6930 after dropping to levels around $0.690 last week.

– CNBC’s Fred Imbert contributed to this report.