By Stanley White
TOKYO (Reuters) – Asian shares were little changed on Wednesday as investors awaited new developments toward scaling back a bruising trade war between the United States and China.
MSCI’s broadest index of Asia-Pacific shares outside Japan was unchanged. Australian shares () were up 0.14%, while Japan’s Nikkei stock index () rose 0.35%.
Treasury yields fell slightly in Asia and crude oil futures also dipped as some investors started to temper their optimism about progress in the trade dispute in the absence of concrete progress in negotiations between the world’s two-largest economies.
The dollar held onto overnight gains against the yen and the euro after better-than-expected data on the U.S. services sector, but some analysts warn it will be difficult to shake lingering concern about the global economic outlook.
“We’ve had a good run-up, but there may be some consolidation,” said Shane Oliver, head of investment strategy and chief economist at AMP Capital Investors in Sydney.
“The trade war is the biggest reason that global growth has weakened over the past 18 months. We would like to see tariffs scaled back. We’re still waiting for clearer signs of a resolution.”
U.S. stock futures () edged 0.05% lower on Wednesday in Asia after the S&P 500 fell 0.01% on Tuesday, having reached a record high in the previous trading session.
The United States and China have signaled they are pushing hard to reach a preliminary “phase one” trade agreement, possibly some time this month.
Traders and investors hope this will roll back at least some of the punitive tariffs that Washington and Beijing have imposed on each other’s goods, but it is still uncertain when or where U.S. President Donald Trump will meet Chinese President Xi Jinping to sign the agreement.
Treasury prices rose slightly in Asia, recovering from a sell-off on Tuesday after data from the Institute for Supply Management (ISM) showed the U.S. services sector expanded more than expected in October.
The yield on benchmark fell to 1.8495% in Asia on Wednesday, while the two-year yield fell slightly to 1.6185%.
A jump in oil prices overnight also faded in Asian trading.
U.S. crude () fell 0.35% to $57.03 per barrel.
In the currency market, however, the dollar continued to benefit from the positive ISM data.
The dollar, which traded at 109.16 yen , close to its highest since Aug. 1. The greenback also traded at $1.1075 per euro (), approaching its highest level since Oct. 16.
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