Asian markets fall on Chinese anger over Pelosi’s possible visit to Taiwan



Asian markets fell on Tuesday on geopolitical fears sparked by the possibility of US House Speaker Nancy Pelosi visiting Taiwan, fueling tensions between Beijing and Washington.

Traders were already nervous at the release of data showing that the region’s economies are beginning to suffer the effects of inflation.

A possible meeting between Pelosi and Taiwanese President Tsai Ing-wen will irritate Beijing, which has said that if such a visit takes place, Washington would be “playing with fire.”

Stock markets in Hong Kong and Shanghai lost 2.4% and 2.3%, respectively, while Taipei fell 1.6%.

Tokyo fell 1.4% while Sydney, Seoul, Singapore, Wellington and Jakarta also recorded declines.

In the foreign exchange market, the safe-haven Japanese yen rose to its highest level in two months against the US dollar, while the Taiwanese dollar fell 0.7%.

“The risk is increasing,” said Stephen Innes of SPI Asset Management.

“Pelosi will almost certainly visit Taiwan on Tuesday, so it’s up to China to see if the situation escalates,” Innes added, noting that “it might just be a storm in a teacup, but international investors and Taiwanese are quite worried.

“Nobody wants a real war, but the risk of a mishap or even an aggressive escalation of military games is real, and can always lead to tactical error,” he warned.

The spike in tensions comes less than a week after US President Joe Biden and Chinese President Xi Jinping spoke by phone. The Chinese leader warned alongside him not to “play with fire” in the relationship with Taiwan.

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