Japanese and Australian markets fell after earnings concerns and threats by US President Donald Trump to impose fresh tariffs on China rattled investors with most of Asia shut for a holiday.

Although technology leaders like Microsoft and Facebook posted strong earnings, sentiment was rattled by Apple’s pandemic-hit earnings and a warning by Amazon.com of a loss in the second quarter.

Japan’s Nikkei 225 fell 2.84% and Australia’s S&P ASX 200 tumbled 5% with investors fleeing to the safety of US Treasuries with the benchmark 10-year Treasuries yields down 3 basis points to 0.61%.

Trade war jitters reemerged as Trump threatened China with fresh tariffs as he stepped up his attacks on Beijing over the coronavirus crisis, saying he had seen evidence linking a Wuhan lab to the contagion.

See: Trump says evidence ties China lab to virus

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Meanwhile, the economic gloom continues with South Korea reporting its exports declined sharply in April.

“Today’s trade release suggests a bigger external shock may be underway in Q2, even if domestic demand starts to improve on a q/q basis,” said Barclays analyst Angela Hsieh.

“While Korea’s exports remained resilient from earlier China-centric supply-side disruption (with the exception of auto sectors), the bigger challenge now is from the destruction of external demand.”

She added that it was still uncertain whether the weakness in April reflected temporary supply chain disruption from global lockdown or a deeper demand destruction amid mass layoff and increased financial distress of companies, which will take longer to recover.

“Nevertheless, we think trade performance can only start to recover gradually from H2 onwards, in our optimistic scenario, as Europe and US slowly exit lockdown,” she predicted.

Wall Street’s overnight fall came after the US Labor Department reported another spike in jobless claims, the EU reported its economy shrank 3.5% in the first quarter, and the jobless total in Germany soared to 13.2% in April.

Apple Inc. reported its profit fell in the second quarter despite the rise in revenue, bringing down its shares 2.55% in after hours trading.

Amazon.com issued a guidance about its second-quarter performance saying its “operating income (loss) is expected to be between $(1.5) billion and $1.5 billion, compared with $3.1 billion in second quarter 2019.” It assumed $4 billion in costs for dealing with Covid-19.

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