Asia report: Investors hold their breath ahead of US-China talks

In Japan, the Nikkei 225 was down 0.52% at 20,556.54, as the yen weakened 0.25% against the dollar to last trade at JPY 109.67.

The broader Topix fell 0.41% in Tokyo, to finish the day at 1,550.76.

On the mainland, the Shanghai Composite was off 0.72% at 2,575.58, and the smaller, technology-heavy Shenzhen Composite slid 1.28% tp 1,283.71.

South Korea’s Kospi was 1.05% higher at 2,206.20, while the Hang Seng Index in Hong Kong rose 0.4% to 27,642.85.

The positive movements in Korea came despite a slide for LG Display, which lost 3.66% after it said it was expecting lower display panel shipments in the first quarter due to weaker demand.

Investors had their focus well and truly on the ongoing trade war between Beijing and Washington, with high-level negotiations due to start in the US later in the day.

China’s vice-premier Liu He will meet US federal officials for the two days of talks, just a day after the US Department of Justice filed a number of charges against Chinese telecoms technology giant Huawei.

“Today could be a crucial day for financial markets with the US-China trade discussions set to open in Washington and then the FOMC delivering it's latest rate announcement and statement,” noted analysts at Rakuten Securities Australia.

“Investors are hoping for a positive outcome from the talks and Steven Mnuchin lifted some players hopes by declaring that 'Everything is on the table' and that the US could lift tariffs on China, however once again the market will be looking for solid progress before a real rally can take place.”

Oil prices were higher as the region went to bed, with Brent crude last up 1.0% at $61.94 per barrel, and West Texas Intermediate rising 1.24% to $53.98.

In Australia, the S&P/ASX 200 managed gains of 0.21% to close at 5,886.70, as the materials sector jumped 2.14%.

Of the major miners in the sunburnt country, BHP added 2.55%, Fortescue Metals advanced 7.75% and Rio Tinto was up 4.51%.

In economic news from Canberra, Australia’s consumer price index rose above expectations in the latest reading, although core inflation was still below the Reserve Bank of Australia’s targets.

Across the Tasman Sea, New Zealand’s S&P/NZX 50 was down 0.9% at 8,925.52, as the tourism sector took a hit following a profit warning from flag carrier Air New Zealand, which slid 13% to a three-month low.

The down under dollars were a mixed picture against the greenback, with the Aussie last 0.41% stronger at AUD 1.3918, and the Kiwi weakening 0.11% to NZD 1.4649.