Asian stocks pared earlier losses to trade mostly flat Thursday as investors awaited clarity on when the next steps in the U.S. and China trade negotiations might happen. The dollar held near a nine-month high and Treasury yields declined.
Equities were little changed across the region having climbed from intraday lows in thin trading. U.S. futures pared losses though European contracts were lower. Earlier, the S&P 500 Index closed higher on below average volume. The yen was stronger after Trump administration officials appeared to show no urgency in resolving the trade fight. The pound held losses after U.K. Prime Minister Boris Johnson moved to suspend parliament, increasing the risk of a no-deal Brexit.
Investor sentiment remains fragile after President Donald Trump’s recent pronouncements on trade and as optimism for a resolution becomes more difficult to sustain. Treasury Secretary Steven Mnuchin said U.S. trade officials expect Chinese negotiators to visit Washington, but wouldn’t say whether a previously planned September meeting would take place, while White House trade adviser Peter Navarro played down a quick resolution.
“There’s no appetite to actively trade equities right now,” said Ayako Sera, a market strategist at Sumitomo Mitsui Trust Bank Ltd. in Tokyo. “Investors’ current stance probably is to see through carefully what kind of impact the latest tariff hike has on the global economy.”
Meanwhile, the bond rally continues unabated, with the yield on 30-year U.S. Treasuries sinking to a record low of 1.90% Wednesday. Mnuchin said issuing ultra-long U.S. bonds is “under very serious consideration” in the Trump administration, possibly setting up a move that would mark a historic revamp of the $16 trillion Treasuries market.