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TOKYO (Reuters) – Asian stocks were on shaky ground on Wednesday while the Chinese yuan stood near the Sino-U.S. trade war haunted investors ahead of an end-of-week deadline for U.S. tariffs on trillions of dollars worth of Chinese imports.
MSCI's broadest index of Asia-Pacific shares outside Japan edged up 0.1 percent in early trade, a day after it hit a nine-month low. Japan's Nikkei lost 0.5 percent.
Wall Street dropped on Tuesday, giving up early gains in a truncated session ahead of the Independence Day holiday on Wednesday.
The S & P 500 lost 0.49 percent while the Nasdaq Composite dropped 0.86 percent.
Facebook lost 2.3 percent after the Washington Post Commented on the results of this study.
Micron Technology Inc. fell 5.5 percent after its rival firm, Taiwan-based competitor United Microelectronics Corp. 2303.TW, said it received a temporary injunction in China.
Coming on the heels of escalating tensions between the United States and China over tariffs and investment restrictions, the injunction sparked off in other U.S. chipmakers.
"We have the issue of Micron just when they lose their momentum after their stellar performance so far this year. "We would see further profit-taking in the sector, that would be worrying about their heavyweight in major indexes," said Nobuhiko Kuramochi, chief strategist at Mizuho Securities.
The news hit chip-related shares in Japan. SMC Corp, manufacturer of machinery used for chip-making, fell 6.5 percent while Advantest, maker of chip inspection machines, fell 5.6 percent.
Many investors fear Washington will go ahead with its plan to impose tariffs on $ 34 billion worth of Chinese goods on July 6, which Beijing has vowed to match with tariffs on U.S. products, raising the risk of a full-blown trade war.
In the currency market, the yuan remained under pressure.
The Chinese currency fetched 6.6715 per dollar in early Asian trade, off Tuesday's 11-month low of 6.7344 after China's central bank moved to calm jittery financial markets.
The People's Bank of China Governor Yi Gang said in a statement on Tuesday that the central bank was fluctuating in the foreign exchange market and would be seeking a stable and reasonable level.
The Thomson Reuters / HKEX Global CNH index, which tracks the offshore yuan against a basket of currencies on a daily basis, has lost more than 3 percent in the past two weeks.
On the other hand, the Mexican peso surged 2.6 percent, its biggest one-day gain in more than two years, on the heels of the country's newly elected president.
Major currencies were treading water as traders fretted about the fallout of the intensifying trade frictions between Washington and the rest of the world.
The euro stood little changed at $ 1.1658, keeping gains after the Chancellor Angela Merkel's government.
The dollar changed hands at 110.56 yen.
Oil prices were supported by larger-than-expected fall in U.S. stockpiles data from the American Petroleum Institute's confounded worries about supply shortage.
U.S. light crude futures traded up 0.6 percent at $ 74.62 per barrel, after rising above $ 75 for the first time in three years on Tuesday.
International Brent futures benchmark stood flat at $ 77.77.
Copper, on the other hand, hit nine-month lows on Tuesday on worries frictions could slow down global growth. It last traded at $ 6,521, up 0.5 percent on the day but still low Tuesday of $ 6,490.
Editing by Shri Navaratnam
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