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Asian stocks track Wall Street lower

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Gold huddled near record high on safe haven flows

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Fed's cautious tone provides dollar support

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Investor focus turns to details of Trump's reciprocal

tariffs

By Ankur Banerjee

SINGAPORE, March 21 (Reuters) - Asian stocks inched

lower on Friday in a subdued end to the week as deepening

geopolitical worries and fears over U.S. tariffs and their

impact on the global economy curbed investors appetite for risk,

keeping safe-haven gold near record highs.

Policymakers across the globe struck a cautious note in a

week filled with central bank meetings as uncertainty in global

economics and politics grew. The U.S. Federal Reserve, the Bank

Of Japan and the Bank of England all held rates steady.

Central bankers highlighted the unsettled economic outlook

due largely to rising trade tensions triggered by the United

States under President Donald Trump. Trump intends to impose new

reciprocal tariff rates on April 2.

Reports of Israeli airstrikes on Gaza and a huge blast from

a Ukrainian drone attack on a Russian military airfield were a

reminder of rising geopolitical tensions pushing investors

towards safe haven assets.

"With the bar for near-term rate cuts still high, markets

have shifted focus back to growth concerns and tariff risks

which will continue to fuel volatility," said Charu Chanana,

Saxo's chief investment strategist.

Asian stocks, taking cues from Wall Street, were subdued,

with MSCI's broadest index of Asia-Pacific shares outside Japan

down 0.22%. Japan's Nikkei, however, was

up 0.38% led by banking stocks.

U.S. stocks closed slightly lower overnight after veering

between gains and losses. Futures for S&P 500 and Nasdaq

inched higher in Asian hours, while European futures were

little changed.

Chinese stocks eased slightly in early trading. Hong Kong's

Hang Seng index was 0.68% lower after a 1% drop on

Thursday as investors turned cautious following a surge in tech

stocks and the index hitting a three-year high on Tuesday.

Investors will now focus on the details of the Trump

administration's April 2 tariffs as markets become increasingly

nervous about the impact of tit-for-tat tariffs on inflation and

economic growth.

Ray Sharma-Ong, head of multi-asset investment solutions for

Southeast Asia at Aberdeen Investments, said the main

uncertainty revolves around the size of reciprocal tariffs,

which may lead to markets repricing further downside risks to

growth.

The growing uncertainty and the Fed reiterating that it was

in no rush to cut rates lent support to the dollar. The dollar

index measure against a basket of six counterparts was

steady at 103.84, after climbing 0.36% on Thursday.

The index fell to a five-month low this week as hopes for

growth-friendly policies under Trump gave way to anxiety that

the global trade war he started could trigger a U.S. recession.

The yen was at 149.11 per dollar in early trading

close to the near five month high of 146.545 touched last week.

The yen is up 5% this year on expectations that the BOJ will

hike rates again in 2025.

Data showed Japan's core inflation hit 3.0% in February and

an index stripping away the effect of fuel rose at the fastest

pace in nearly a year, a sign of broadening price pressure that

reinforces market expectations of further interest rate hikes.

"Although Governor Ueda made much of the risks surrounding

U.S. trade policy on Wednesday, we think he's just hedging his

bets - considering it a risk factor," said Min Joo Kang, senior

economist at ING.

"Therefore, if trade tensions don't escalate more than the

market currently expects, they won't affect the BOJ's rate hike

plans."

In commodities, oil prices rose on Friday, poised for their

strongest weekly performance since January.

Brent crude futures climbed 0.5%, while U.S. West

Texas Intermediate crude futures were up 0.6%. Both were

set for 2% gains for the week.

Gold eased a bit at $3,037.27 a touch below the

record high of the previous session, but on course for the third

straight week of gains, supported by safe-haven demand.

(Editing by Kate Mayberry)