*

South Korean and Japanese automakers slide as US tariffs

bite

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Gold at record high on safe-haven flows, no signs of

let-up

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Investor focus now on reciprocal tariffs due for next week

(Updates to Asia afternoon)

By Ankur Banerjee

SINGAPORE, March 28 (Reuters) - Asian stocks slid on

Friday with heavy selling in South Korea and Japan while

safe-haven gold was perched at a record high as the latest

tariff salvo from U.S. President Donald Trump stoked investor

worries of an all-out trade war.

Trump moved ahead with a 25% tariff on auto imports due to

kick in next week, drawing fierce criticism from politicians and

industry executives across the globe and a warning from global

car makers that price hikes were likely on the way.

The widening of the global trade war that Trump kicked off

upon regaining the White House has jolted markets, with shares

of global automakers hit particularly hard.

In Asia, Japan's Nikkei fell nearly 2%, led by sharp

drops in Toyota ( TM ) and Honda ( HMC ), while South Korea's

benchmark index shed 2%. The auto industry is a pillar

of both countries' economies.

European stock futures pointed lower, with automaker-heavy

Germany's DAX futures down 0.2%. U.S. futures were

little changed.

"U.S. tariffs on auto imports do not come as a huge

surprise, having been flagged for some time," said Fred Neumann,

chief Asia economist at HSBC.

"To some extent, producers can shift supply chains and

production locations to mitigate these effects. At the same

time, they may also be able to pass some of the price increases

to U.S. consumers, given that tariffs affect nearly all

producers."

Some automakers, including Volvo Cars,

Volkswagen's Audi, Mercedes-Benz and

Hyundai, have already said they will relocate

portions of their production. Ferrari, which makes all

of its cars in Italy, said it would raise prices by up to 10% on

some models.

Hong Kong's Hang Seng index fell 0.6% as traders

awaited clarity on Trump's tariff plans for China. Trump said he

would be willing to reduce tariffs on China to get a deal done

with TikTok's Chinese parent ByteDance to sell the popular app.

The focus is now on reciprocal tariffs the U.S. is due to

announce on April 2. Trump indicated the measures may not be the

like-for-like levies he has been pledging to impose.

"Not surprisingly, the tariff talk is resulting in another

round of risk-off ... as traders try to ascertain the

implications, but generally conclude that tariffs will be both

growth-restraining and inflation-producing," said Thierry

Wizman, global FX & rates strategist at Macquarie.

INFLATION TEST

In the currency markets, the U.S. dollar was steady ahead of

inflation report later in the day. The U.S. Personal Consumption

Expenditures data, the Federal Reserve's preferred gauge for

prices, for February is expected to show a rebound in consumer

outlays and annual core PCE prices heating up to 2.7%.

The dollar is headed for a quarterly drop as worries about

the impact of tariffs on U.S. growth weigh. The euro

eased to $1.07887, but was on course for a 4% rise in the

January-March period.

The yen was stronger at 150.675 per dollar, on

course for a nearly 4% gain against the greenback in the quarter

as traders bet on the Bank of Japan hiking interest rates again.

Data on Friday showed core consumer inflation in Tokyo

accelerated in March, remaining above the central bank's target

on steady gains in food costs. That kept alive market

expectations of a near-term rate hike.

DBS strategists expect near-term consolidation for the yen,

which they believe is caught between trade risks and firming

inflation.

In commodities, gold prices scaled a record peak on

Friday as the threat of trade wars drives a rush towards the

safe-haven metal. Spot gold was last up 0.77% at $3,079.5 per

ounce.

Gold is up more than 17% in the first quarter of the year,

heading for its best quarterly performance since 1986.

"Continued haven demand, coupled with EM central bank buying

in an effort to diversify FX reserves, make for a convincing

bull case here," said Michael Brown, senior research strategist

at Pepperstone.

Oil prices eased a bit as traders assessed a tightening of

crude supplies along with new U.S. tariffs and their expected

effect on the world's economy.

Brent crude futures were 0.24% lower at $73.85 a

barrel. U.S. West Texas Intermediate crude futures were

0.27% lower at $69.73.