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Asian Equities Lower Amid Renewed China-U.S. Tension

Asian equities were mostly lower in morning trade – Asian equities were mostly lower in morning trade on Thursday amid renewed China-U.S. tension, as U.S. President Donald Trump hinted he has second thought about the trade deal he agreed with Beijing over the weekend.

“Our Trade Deal with China is moving along nicely, but in the end we will probably have to use a different structure in that this will be too hard to get done and to verify results after completion,” Trump said on Twitter on Wednesday.

Meanwhile, the Federal Reserve meeting on Wednesday was also in focus as it indicated central bankers are happy to let inflation run above the 2% goal for a “temporary period”, indicating they're in no rush to tighten more aggressively.

In Asia, Japan stocks underperformed its regional peers, with a strengthening yen cited as catalyst for the selling in local stocks after U.S. President Trump ordered the Commerce Department to consider a probe into automobile imports, which could lead to possible fresh tariffs on foreign vehicles.

The Nikkei 225 was down 1.2% by 9:30 PM ET (01:30 GMT).

China’s Shanghai Composite and the SZSE Component both slipped 0.1%, while Hong Kong’s Hang Seng Index edged up 0.03%.

Although not a directional driver, reports that the U.S. is seeking better access for imports of genetically modified crops into China garnered some attention. Citing two people familiar with the matter, Reuters reported that agricultural trade has been a long term main issue between the two nations.

"I can say with full confidence that biotech is one of the key issues for USDA in this conversation with the Chinese," the source said.

Elsewhere, Australia’s S&P/ASX 200 slipped 0.1%, while South Korea’s KOSPI traded 0.3% lower.

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