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Asia: Stocks face losses as tariff worries linger
[SYDNEY] Asian stocks looked set for heavy declines on Wednesday after the US threat of higher tariffs on imports from China pushed American equities down the most since March. The yen held its climb and Treasuries edged higher.
Futures on Japanese shares indicated losses of about 2 per cent when trading opens in Tokyo, with Hong Kong and Australia also signaling declines.
The S&P 500 Index ended weaker despite closing off the session lows, posting its broadest day of declines since the Christmas Eve sell-off.
China's top trade negotiator still intends to visit Washington later this week as President Donald Trump ratchets up pressure to clinch a deal that many market participants had expected was all but done.
"The two largest economic powerhouses, the US and China, either will be at a trade war or a trade peace and in reality there's only a couple of people who know the answer to that and it isn't those of us on Wall Street," Larry Robbins, Glenview Capital Management's CEO, told Bloomberg TV in New York. "It's to be expected that there's some volatility into this critical week."
Sentiment remains fragile as traders wait for the next development in the dispute between the world's two-biggest economies and trade data that's coming Wednesday in China.
China's government confirmed on Tuesday that Vice-Premier Liu He would visit the the US for trade talks on May 9 and 10. At the same time, the country was said to be preparing retaliatory tariffs on American imports should Mr Trump carry out his threat of further duties.
Elsewhere, the New Zealand dollar edged down ahead of the country's finely poised central bank decision. Turkey's lira and stocks slumped Tuesday as investors interpreted a decision to redo Istanbul's municipal vote as yet another manifestation of President Recep Tayyip Erdogan's influence over independent institutions. Oil steadied after dropping toward US$60 a barrel.
Here are some notable events coming up:
- China releases trade data on Wednesday, and the US does so on Thursday.
- South Africa holds national elections on Wednesday.
- China reports on inflation Thursday. The US releases the April CPI report Friday.
- A Chinese trade delegation is expected to arrive in Washington for talks.