HONG KONG - Asian markets extended losses on Tuesday and silver hit a fresh peak on fears of a US-EU trade war fuelled by Donald Trump's tariff threat over opposition to his grab for Greenland.
After a bright start to the year fuelled by fresh hopes for the artificial intelligence sector, investors have taken fright since the US president ramped up his demands for the Danish autonomous territory, citing national security.
With Copenhagen and other European capitals pushing back, Trump on Saturday said he would impose 10 percent levies on eight countries -- including Denmark, France, Germany and Britain -- from February 1, lifting them to 25 percent on June 1.
The move has raised questions about the outlook for last year's US-EU trade deal, while French President Emmanuel Macron has called for the deployment of a powerful, unused instrument aimed at deterring economic coercion.
In response, US Treasury chief Scott Bessent said Monday that any retaliatory EU tariffs would be "unwise".
The prospect of another trade standoff between two of the world's biggest economic powers has fuelled a rush to safety and dealt a blow to risk assets.
After hefty selling in Europe, Asia equities extended losses.
Tokyo, Hong Kong, Shanghai, Sydney, Seoul, Singapore, Taipei, Manila and Wellington were all down.
Silver hit another record high, touching $94.73 in Asian trade, while gold held just shy of its own peak hit Monday.
Meanwhile, Treasury yields rose amid a move out of US assets fuelled by the uncertainty sparked by Trump's latest volley.
Japanese government bonds yields also rise, with that on the 40-year note hitting the highest since it was launched in 2007, after Prime Minister Sanae Takaichi called snap elections Monday and pledged to cut a tax on food for a two-year period.