Asian stock investors woke up to another day of market slumps after salvos from the U.S. and China in their ongoing trade war. Declines were tempered by mid-morning after China set its yuan reference rate stronger than analysts expected.
China’s shock and awe tactics had left investors reeling, sending a “tsunami of risk aversion across global markets,” said Stephen Innes, a managing partner at Vanguard Markets Pte. in Singapore.
China’s Tuesday yuan fixing is “ambiguous enough to keep two-sided interest alive while still conveying a message to U.S. trade hawks that in no uncertain terms will China be a pushover if trade talks ever resume,” he said.
Asian stock markets saw a sea of red, with Japan’s Topix index down 1.9% at the morning break. U.S. stock-index futures fell as much as 1.9% before narrowing losses to 0.7%.
Yesterday, the S&P 500 Index tumbled 3% after China allowed its currency to fall in retaliation for new U.S. tariffs, prompting the Trump administration to officially call China a currency manipulator. Today China set its yuan fixing stronger than 7 against the U.S. dollar.
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