• Oil prices dive almost 4%, safe-haven currencies gain

• Wall St futures down 1.5%, Nikkei tumbles 3.8%

• The onshore yuan hovers just above the lowest since 2007

• Longer-dated Treasuries getting slammed in Asia

Major stocks indexes sank in Asia on Wednesday after President Donald Trump's eye-watering 104% tariffs on China took effect, while a savage selloff in Treasuries sparked fears foreign funds were fleeing U.S. assets.

The U.S. dollar fell against safe-haven currencies, but the onshore yuan hovered just above the lowest level since late 2007 as Beijing allowed the currency to depreciate further amid the sharp escalation in the trade war with U.S.

Few assets were spared the recession fears engulfing markets, with oil prices diving almost 4%.

The pain is likely to spread to Europe too, with EUROSTOXX 50 futures pointing to a 3.7% drop upon open. Both S&P 500 futures and Nasdaq futures dropped 1.6%.

Overnight, Washington confirmed 104% duties on imports from China would take effect at 12:01 a.m. Eastern Time (0401 GMT), as planned. That deadline passed without new developments on trade.

"U.S. and China are stuck in an unprecedented, and expensive, game of chicken, and it seems that both sides are unwilling to back down," said Ting Lu, chief China economist at Nomura.

"Given the extraordinarily fluid situation, it is impossible to reasonably estimate the impact of the ongoing U.S.-China trade war on China’s economy."

The shifting headlines on tariffs and the spectre of a prolonged trade war between the world's two biggest economies sparked sharp volatility in financial markets.

The S&P 500 was swept up in one of the biggest reversals in at least the last 50 years, with the benchmark index losing 4.2 percentage points from a positive start to a negative finish. The index has lost $5.8 trillion in stock market value, the deepest four-day loss since it was created in the 1950s.

range plot showing start and end of trading sessions.

Late on Tuesday, Trump said China was manipulating currency to protect against tariffs, but he thought China would make a deal at some point.

A passerby walks past an electronic screen displaying a graph showing today's Japan's Nikkei share average movements outside a brokerage in Tokyo

China's blue chips reversed earlier losses to rise 0.3% likely underpinned by continued support from Beijing. Hong Kong's Hang Seng index (.HSI) fell 1.6%.

MSCI's broadest index of Asia-Pacific shares outside Japan dropped 1.9%.

Other stock markets in Asia were also deep in the red. Japan's Nikkei (.N225) tumbled 3.6%, after rallying 6% on Wednesday on hopes that Tokyo may get some trade deal with the U.S. Taiwanese stocks also fell 4.6% even though the government activated a $15 billion stabilisation fund.

Analysts at JPMorgan believed the rapid escalation with U.S. tariffs on China were disruptive enough to push the global economy into recession.

"Given the import bill from China, the China tariff alone amounts to a whopping $400bn tax hike on U.S. households and businesses," they said in a note to clients. "The currency is likely to be a release valve for China policymakers."

The People's Bank of China on Wednesday set its guidance for the yuan at 7.2066 per dollar, the weakest level since September 2023. That pushed the onshore yuan down to 7.3499 per dollar, just a tad stronger than the 7.3510 level which is the weakest since late 2007.

In the Treasuries, the benchmark 10-year yield rose 24 basis points to 4.501%, an unusual move in the Asia time zone, which brought the total rise over the past three days to a whopping 51 bps.

The 30-year yield surged 28 bps tp 5.023%, the highest since late 2023

In currency markets, safe-haven currencies like the yen and Swiss franc found some more love, with the dollar skidding 0.8% to 145.10 yen and down 0.5% to 0.8430 Swiss franc .

Elsewhere, the Reserve Bank of New Zealand cut interest rates by 25 bps to 3.5%, and opened the door for potentially bigger cuts as it warned about downside risks to the economy from global trade barriers.

Oil prices dived almost 4% on Wednesday on concerns about demand from China. Brent futures plunged 3.7% to $60.50 a barrel, while U.S. crude futures also tumbled 4.1% to $57.16 per barrel.

Gold regained its upward momentum and was last up 0.7% at $3,005 per ounce.