In the foreign exchange markets, the Chinese yuan depreciated against the US dollar, reaching its lowest level in a year and a half years. It pared some losses in the afternoon to settle at 6.71 to the US dollar.
The losses came after the Dow fell more than 1,100 points and the S&P 500 fell 3.7% on Thursday, wiping out Wednesday’s gains as investors worried about the impact of the rise US interest rates and the risk of recession.
Investors in Asia are also nervous after the latest comments from senior Chinese leaders on its efforts to stop the spread of the coronavirus.
President Xi Jinping said all levels of government should “resolutely” adhere to the country’s zero-Covid policy. He made the remarks during a meeting Thursday with the Communist Party’s Politburo Standing Committee – the country’s top decision-making body.
Officials at all levels of government must “resolutely struggle with all words and deeds distorting, doubting and denying China’s Covid control policy”, Xi said.
“This could serve to dampen some hopes of any policy shifts from Covid-19, suggesting that the economic recovery will remain protracted and uneven,” Yeap Jun Rong, market strategist at financial services firm IG, wrote on Friday. Group.
— Nicole Goodkind contributed to this report.