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  • Asian equities knocked lower in a continuation of risk flows, but traders are recovering and pushing stocks back into gains for the day.
  • Chinese equities are still looking at losses on the day as the US continues to pelt China with tariff threats.

Asian equities dipped in early Wednesday action as the US’ tariffs on Chinese goods, with promises of more on the way, continued to eat away at market sentiment, but bourses largely managed to recover on the day and post into the green, though China’s equities are still a little exposed to selling, while Japan’s Nikkei index is still trading near 22,350.00.

A US trade representative on Tuesday stated that China has underestimated President Trump’s resolve in the current tariff exchange between the two countries, and markets are awaiting a response from China on the latest round of threatened tariffs, with Trump seeking an additional 10% tariff on $200 billion of Chinese imported goods. The two countries have aimed a set of 25% tariffs on $50 billion of goods going both ways recently, and broader market sentiment has suffered as the prospect of an all-out trade war once again takes a step closer to becoming a reality.

Nikkei levels to watch

Japan’s leading equity index tumbled into 22,110.00 yesterday as the US doubles down on its tariff strategy against China, but markets are trying to get some risk appetite back, and the index is peeking back into 22,380.00. Bulls will have plenty of work cut out for them to drag the index back to the week’s highs near 22,830.00, while bears will be looking to take it back down below today’s low of 22,160.00.