The escalating trade war between the US and China dominated financial markets, with China's retaliatory 34% tariff announcement triggering another massive selloff. Asian stocks continued their freefall after global markets lost $3.5 trillion the previous day, with Tokyo stocks plunging over 1,400 points and the Dow dropping below 39,000. Japanese markets were particularly vulnerable as analyses showed Trump's tariffs could reduce Japan's economic growth by up to 2%.

The trade conflict directly undermined Japanese manufacturers' "China+1" supply chain strategy as Southeast Asian production facilities now face unexpected high tariffs. Prime Minister Ishiba announced the establishment of a ministerial meeting to address what Japan Times called a "national crisis."

Meanwhile, South Korea's Constitutional Court unanimously upheld President Yoon Suk Yeol's impeachment over his December martial law declaration, removing him from office and triggering elections within 60 days. Yoon expressed regret in his first statement following the decision.