Asian stocks ended lower on Thursday despite softer US inflation data bolstering the case for more Federal Reserve interest-rate cuts this year.
Tariff worries kept investors on the edge after Canada and the EU swiftly retaliated against US steel and aluminium tariffs and President Trump vowed to respond to the countermeasures.
Gold moved higher near its record peak as the dollar dipped and US Treasury yields turned lower on concerns over a potential recession in the United States.
Oil prices eased after a surge in the previous session on data showing a larger-than-expected draw in US gasoline stocks.
China's Shanghai Composite index dropped 0.39% to 3,358.73 on trade worries and signs of deepening deflationary pressures in the country.
Hong Kong's Hang Seng fell 0.58% to 23,462.65. China's Commerce Ministry reportedly held talks with US retail company Walmart after reports emerged that it asked suppliers to bear rising costs incurred by increased US tariffs.
Japanese markets ended little changed while the yen strengthened as comments from the Bank of Japan chief bolstered rate hike expectations.
The Nikkei average finished marginally lower at 36,790.03, while the broader Topix index settled 0.13% higher at 2,698.36.
Seoul stocks ended on a flat note, with the Kospi average finishing marginally lower at 2,573.64 following strong gains in the previous session.
The Bank of Korea said in a monetary policy report that Trump's escalating trade war could drag on longer than expected and increase the risk of capital outflows while also raising volatility in the dollar-won exchange rate.
LG Energy Solution, Samsung Biologics and LG Chem fell 2-3%, while defence equipment manufacturer Hanwha Aerospace jumped 6.3% and shipbuilding giant Hanwha Ocean rallied 3.5%. Australian markets ended lower, giving up early gains as multinational investment bank Morgan Stanley cut its rating for Australian equities and said it expects Australian companies to underperform compared to global markets.
The benchmark S&P/ASX 200 dropped 0.48% to 7,749.10, with financials and mining stocks leading losses.
The broader All Ordinaries index settled 0.45% lower at 7,966.60. Across the Tasman, New Zealand's benchmark S&P/NZX-50 index slipped 0.33% to close at 12,209.05.
US stocks ended mostly higher overnight as consumer inflation came in lower than forecast by economists.
Data showed that US CPI rose 2.8% annually in the month, down from 3%in January and below the 2.9% forecast from economists.
The core CPI,which excludes volatile food and energy prices, rose 3.1% on an annual basis, following the 3.3% increase in January.
White House Press Secretary Karoline Leavitt said the report showed"the economy is moving in the right direction under President Trump." The tech-heavy Nasdaq Composite rallied 1.2% to rebound from six-month lows hit in the previous session.
The S&P 500 rose half a percent to snap a two-day losing streak, while the narrowed Dow dipped 0.2%.
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