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  • Asian shares remain pressured even as Japan announces fresh stimulus, US aid package negotiations progress.
  • US-China tussle intensifies, covid woes also escalate amid fears of no-deal Brexit.
  • Light calendar fails to portray major moves, Aussie data, Japanese GDP came in mostly positive.

Asian stocks remain lackluster despite policymakers in Japan and the US remain active to combat the coronavirus (COVID-19) with stimulus measures. While the American policymakers are yet to finalize the deal, despite showing progress off-late, Japanese Prime Minister Yoshihide Suga announced his first budget to combat the pandemic, third for the country, worth around 73.6 trillion yen ($707 billion).

On the contrary, COVID-19 restrictions are tightened in Hong Kong and Tokyo after cases escalate while the US is likely to be turned down for more vaccines in June as Pfizer is preoccupied with overseas orders.

The Sino-American tension is back in focus with the Trump administration announcing fresh sanctions on 14 Chinese diplomats over the Hong Kong crackdown. Even so, Hong Kong police arrested a few more of the opposition party members. Elsewhere, China’s Foreign Minister Wang Yi underscores commitment to the phase 1 trade deal while showing optimism relating to the Phase 2 deal talks with US President-elect Joe Biden.

Talking about data, Aussie Q3 Housing Price Index and sentiment figures from the National Australia Bank (NAB) came in positive for November while the Final readings for Japan’s Q3 GDP rose past-5.0% initial forecast to 5.3%.

Against this backdrop, MSCI’s index of Asia-Pacific shares outside Japan drops 0.20% whereas Japan’s Nikkei mark 0.40% intraday losses by press time. Further, equities in China and Hong Kong mark losses amid fears of fresh trade/political tension while Australia’s ASX 200, New Zealand’s NZX 50 and India’s BSE Sensex all print mild gains amid hopes of further stimulus and easing virus conditions at home. Commodities firm-up while the US dollar index (DXY) remains sluggish.

Looking forward, global traders will keep their eyes on the risk catalysts for fresh impetus amid a lack of major data/events.