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Asian shares step back from New Year rally as trade concerns resurface

Reuters  |  TOKYO 

By Hideyuki Sano

TOKYO (Reuters) - The New Year rally in Asian ran out of steam on Thursday as concerns about the U. S. administration's protectionist stance hit while U. S. bonds were dented by speculation may curtail buying.

MSCI's broadest index of outside <. MIAPJ0000PUS> shed 0.1 percent in early trade, slipping further from Tuesday's 10-year peak. Japan's Nikkei <. N225> lost 0.6 percent.

U. S. snapped their New Year rally on Wednesday while the Canadian dollar and the Mexican peso fell after a report said increasingly believes that U. S. will soon announce his intention to withdraw from the North American Agreement treaty.

U. S. prices tumbled, boosting the 10-year Treasuries yield to a 10-month high of 2.597 percent after reported that China, the biggest foreign holder of U. S.

Treasuries, could slow or stop buying government bonds.

"I would think that is flexing its muscles as the is looking into measures to deal with its trade deficit with China," said Daisuke Uno, at Sumitomo Mitsui

"I have been expecting rising trade frictions between the and this year. It appears is quick to touch the Achilles heel of the States," he added.

Investigations into U. S. imports are due to report to Trump this month, including probes into whether imports of and aluminium threaten U. S. national security. A separate probe into Chinese intellectual property practices may also conclude as early as this month, Axios reported, and could result in tariffs on the country's

U. S Treasuries later pared some of their losses and the 10-year yield stood at 2.555 percent in early Asian trade.

The speculation that may reduce its buying in U. S. bonds helped to underpin the euro, the most obvious alternative assets to the dollar.

The euro traded at $1.1950 , extending its rebound from Tuesday's low of $1.1916.

Against the yen , the dollar posted a even bigger fall of 1.1 percent on Wednesday, its largest decline in almost eight months.

It last stood at 111.40 yen, after hitting a six-week low of 111.27 yen the previous day.

The yen has been buoyed this week after a cut in the of Japan's buying on Tuesday fuelled speculation that the could eventually seek to exit from its stimulus later this year, following in the footsteps of other major central banks.

The Canadian dollar traded at C$1.2559 per after having lost 0.7 percent on Wednesday.

jumped on Wednesday and settled near three-year highs after data showed a drop in crude inventories and production, though the fall in the latter could be the result of extreme cold temperatures across the

U. S. Intermediate (WTI) crude futures traded at $63.47 per barrel, after hitting a high of $63.67 in the previous session, their loftiest level since December 2014.

futures settled at $69.20 a barrel on Wednesday, up 38 cents. The session high for the was $69.37, highest since May 2015.

(Editing by Shri Navaratnam)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Thu, January 11 2018. 06:39 IST
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