Asian markets continued a global sell-off Thursday and the dollar weakened as trade war fears return to the fore, with worries Donald Trump will go full-steam ahead with his "America First" protectionist agenda.
Investors are back on the ropes after the US said Wednesday it would take action at the World Trade Organization against Indian export subsidies.
That came soon after it emerged Trump is considering tariffs on billions of dollars in Chinese tech and telecoms imports as he takes aim at alleged intellectual property breaches by Beijing.
The news saw a return to volatility after a few days of respite from last week's controversial announcement of levies on steel and aluminium imports.
Adding to the unease among traders is the departure of market-friendly economics advisor Gary Cohn this month and Tuesday's sacking of moderate Secretary of State Rex Tillerson.
On Wednesday, Trump tapped conservative TV pundit and longtime free-market advocate Larry Kudlow to replace Cohn.
Analysts said there is now a growing fear that the White House has set itself on a more hardline course, which could upend global trade as well as impact on key geopolitical issues, particularly the Iran nuclear deal.
Trump is "cleaning house with the establishment picks and putting like- minded thinkers around him", said Greg McKenna, chief market strategist at AxiTrader.
- Trump 'emboldened' -
His "growing confidence -- born of success with tax and hopefully North Korea, among other things -- means he is emboldened to prosecute his 'America First' agenda. That means...there is a real risk that a trade war actually breaks out", McKenna added. "That ultimately can't be good for growth."
There is now speculation the president will look to oust other top members of the White House including Chief of Staff John Kelly and Attorney General Jeff Sessions. MORE/MR/ 1102 hrs
All three main Wall Street indexes ended deep in the red, and the selling carried on in Asia.
Tokyo ended the morning session 0.5 percent lower, hit by strong yen.
Hong Kong fell 0.8 percent, Sydney and Seoul each slipped 0.3 percent and Shanghai was off 0.1 percent, while Singapore dropped 0.8 percent. Taipei, Wellington, Jakarta and Manila were also sharply lower.
The greenback took a hit from the yen as trade war worries sent investors chasing into safe-haven assets, while a disappointing retail sales figure for February dented expectations the Federal Reserve will lift interest rates more than three times this year.
The retail result came after a soft inflation reading, though the US central bank is still widely expected to tighten borrowing costs when it meets next week.
The euro is also holding up despite European Central Bank boss Mario Draghi tempering talk of an end any time soon of its crisis-era stimulus.
- Key figures around 0230 GMT -
Tokyo - Nikkei 225: DOWN 0.5 percent at 21674.48 (break)
Hong Kong - Hang Seng: DOWN 0.8 percent at 31,199.03
Euro/dollar: UP at $1.2382 from $1.2369 at 2100 GMT
Pound/dollar: UP at $1.3971 from $1.3964
Dollar/yen: DOWN at 105.85 yen from 106.32 yen
Oil - West Texas Intermediate: UP 10 cents at $61.06 per barrel
Oil - Brent North Sea: UP seven cents at $64.96 per barrel
New York - Dow: DOWN 1.0 percent at 24,758.12 (close)
London - FTSE 100: DOWN 0.1 percent at 7,132.69 (close).