• Asian stocks fell sharply following a major selloff on Wall Street.
• Concerns about a US recession grow amidst ongoing trade war tensions.
• The Japanese yen strengthened as investors seek safe-haven assets.
• US Treasury yields declined, indicating a shift in market sentiment.
• Commodity prices, including oil, fell amid worries of reduced demand.

SINGAPORE, March 11 (Reuters) - The tumultuous landscape of Asian stocks reflects mounting investor fears as they took cues from a significant downturn in Wall Street, where stocks tumbled sharply due to concerns that a long-standing trade war could hinder US economic growth, potentially leading to a recession. In light of these factors, many investors gravitated towards the safe-haven Japanese yen.

The anxiety surrounding a potential economic slowdown escalated after President Donald Trump mentioned a "period of transition" during a recent Fox News interview, declining to predict whether his tariffs would lead to a recession. Such statements dampened risk sentiment, driving stocks down and exerting pressure on the US dollar and Treasury yields.

In Asia, the financial markets faced a "sea of red," with Japan's Nikkei and Taiwan stocks both slumping around 3%, marking their lowest levels since September. The broad-based MSCI index of Asia-Pacific shares fell over 1%, reflecting a widespread selloff. Even high-performing Chinese stocks succumbed to the negative mood, with the blue-chip index slipping approximately 1%, while Hong Kong's Hang Seng Index fell by 1.5%.

The situation on Wall Street saw the S&P 500 fall 2.7% on Monday, marking its largest single-day drop of the year, while the Nasdaq plummeted 4.0%, its most significant decline since September 2022. Such significant drops have led to a staggering $4 trillion loss in the S&P 500 since its peak last month. Futures for S&P and Nasdaq indicated further caution amongst traders.

As market reactions evolved, Prashant Newnaha, a senior rates strategist at TD Securities, commented that many market participants expect Trump's administration may reverse its tariffs if stock market conditions worsen. He described the current market situation as a "controlled demolition" of stock values.

As the selloff intensified, US Treasury yields responded by declining, with the yield on 10-year notes falling by 5 basis points after a more significant drop in the previous trading session. The two-year note, which typically aligns with Federal Reserve interest rate expectations, also fell to a five-month low.

As investors sought shelter in safe-haven currencies, the Japanese yen gained 0.3% against the dollar, reaching 146.65 per dollar, after falling to its highest level in five months earlier in the session. Similarly, the Swiss franc was also strong, hovering near a recent three-month high.

Market analysts, including Tony Sycamore from IG, noted a rapid shift in market sentiment, going from post-election optimism to heightened recession concerns, primarily driven by ongoing policy uncertainty.

Meanwhile, commodities faced downward pressure, with oil prices also descending for the second consecutive day, driven by expectations of decreased global economic activity due to the US tariffs. As OPEC+ plans to ramp up its supply, Brent futures dropped by 0.65% to $68.83 a barrel, while US West Texas Intermediate crude futures fell by 0.82% to $65.49 a barrel.

In the face of such turmoil, Citi analysts have even downgraded their recommendation for US stocks to "neutral" from "overweight," expressing beliefs that the US economy may not maintain its lead against global counterparts in the months to come. For ongoing updates, visit The Jakarta Post.