Tokyo's main index fends off test of the 100-day moving average
The Nikkei closes lower but bounced off its lows in the last hour of trading as Chinese stocks also recouped losses seen immediately after the lunch break earlier. At one stage, the Nikkei was down by nearly 1% as US increased tariffs on $200 billion worth of Chinese goods and as China vowed to retaliate.
However, the rebound suggests that market participants are still holding out on hopes for some form of compromise to be struck. US equity futures are still down by 0.3% while Treasury yields are flat on the day, hinting at caution still among investors.
As a result, USD/JPY sits flat now at 109.74 after having tested a low of 109.62 in the past hour. Look out for more cautious tones in European trading later as we await the second day of trade talks in Washington.