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Asian stock markets : https://tmsnrt.rs/2zpUAr4

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Nasdaq futures drop 1.1%, Nikkei falls 3.2%

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Trump says US tariffs to cover all countries

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Flight to safety buoys bonds, gold hits record

By Wayne Cole

SYDNEY, March 31 (Reuters) - Asia stocks followed Wall

Street futures lower on Monday as investors struggled to price

in the risk of imminent U.S. tariffs with so little still known

about what form or scope the levies will take.

S&P 500 futures fell 0.6% in early trade, extending

Friday's rout, while Nasdaq futures lost 1.1%. Treasury

yields also dropped further as funds sought any safe harbour,

while gold reached another record peak.

President Donald Trump on Friday said he was open to carving

out deals with countries seeking to avoid tariffs, but media

reports over the weekend claimed he was urging his advisers to

be more aggressive with their plans.

Speaking to reporters late Sunday he said the tariffs would

essentially hit all countries, causing renewed ripples in Asian

markets.

Trump is due to receive their recommendations on Tuesday and

announce initial tariffs on Wednesday, followed by auto levies

the day after. Yet it is still not clear how high the tariffs

will be or what countries and goods they will cover.

The European Union was ready to respond with tariffs of its

own, German Chancellor Olaf Scholz said on Sunday, but there

were also reports the block was preparing a list of concessions

to offer to Trump.

Many economists are worried that tariffs will hit the U.S.

economy hard, even while limiting the Federal Reserve's scope to

cut rates by also lifting inflation in the short term.

"Recession risks have become elevated - to a 40% probability

- on concerns that aggressive U.S. policies hit business and

household sentiment," warned Bruce Kasman, chief economist at

JPMorgan.

"With the latest tariff increases set to push U.S. core

inflation above 4% next quarter, a household sector with a

healthy balance will need to show a willingness to lower its

saving rate to cushion this blow."

Data out on Friday underlined the risks as a key measure of

core inflation rose by more than expected in February while

consumer spending disappointed.

That raised the stakes for the March payrolls report due on

Friday where any outcome below the 140,000 gain expected would

only add to recession fears. Also due are a rush of surveys on

factories and services, along with figures on trade and job

openings.

The threat of a global trade war likewise sent a chill

through Asia, where MSCI's broadest index of Asia-Pacific shares

outside Japan shed 0.5%.

Japan's Nikkei tumbled 3.2% as automaker stocks

continued to suffer fallout from Trump's talk of 25% tariffs on

imported cars and light trucks.

Bond investors seem to be betting the slowdown in U.S.

economic growth will outweigh a temporary lift in inflation and

prompt the Fed to cut rates by around 70 basis points this year.

This, combined with a flight from risk assets, saw 10-year

Treasury yields drop to 4.215%.

The outlook for rates could become clearer when Fed Chair

Jerome Powell speaks on Friday, following a host of other Fed

speakers this week.

The drop in yields saw the dollar dip 0.1% to 149.35 yen

, while the euro was steady at $1.0825. The

dollar index held at 104.00, having slipped for the

previous two sessions.

The perceived safety of gold saw the metal hit another

all-time high at $3,097 an ounce.

Oil prices have been supported by U.S. sanctions against

producers Venezuela and Iran, though the risk of slower global

growth remained a headwind.

Trump on Sunday also said he would impose secondary tariffs

of 25% to 50% on all Russian oil if he feels Moscow is blocking

his efforts to end the war in Ukraine.

Brent rose 8 cents to $73.68 a barrel, while U.S.

crude added 2 cents to $69.38 per barrel.

(Editing by Shri Navaratnam)