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  • Asia equities falling back as US  trade headlines shake out the early week’s bullish hopes.
  • The Trump administration continues to seek more trade-damaging tariffs as the US-China gap on trade negotiations continues to widen.

Asia equities are facing setbacks on Thursday, and Japan’s Nikkei 225 index is back into the 22,400.00 level.

Risk appetite saw a resurgence at the beginning of this week, but market sentiment is quickly retreating following trade headlines that have eviscerated market expectations of improved relations across the board. US President Trump has ordered a national security review of foreign import vehicles as an impetus to impose hefty tariffs on foreign vehicles, and US-China trade relations have taken a hit after Trump announced that he is unhappy with the current state of negotiations with China, and the North Korea summit with the US is now up in the air.

Australia’s ASX index is down -0.17% on the day, while the Shanghai Composite is relatively flat at -0.04%, offset by the Hang Seng’s 0.07% gain on the day, but the big drop comes from Japan’s Nikkei, which is down -1.3%.

Nikkei 225 levels to watch

The Nikkei 225 continues to slip further away from the  23,000.00 major level, as the recent bullish grind appears to have run out of gas after reversing the index’s decline from a low of 20,318.00 in late March. Risk aversion  is sapping further bullishness, and the 23,000.00 major handle constrained prices last December. A bearish continuation from here to could easily fall to 21,500.00 and hit the 50.0 Fibo retracement level, assuming support from the 200-day SMA at 21,700.00 fails to hold.