Asia report: Markets mixed as US-China relations ease further

In Japan, the Nikkei 225 was down 0.18% at 22,960.34, as the yen strengthened 0.13% against the dollar to last trade at JPY 110.91.

Insurance plays led losses on the broader Topix, which itself was 0.23% lower, although a number of big names held on to gains in Tokyo, with Fanuc up 0.88% and Uniqlo owner Fast Retailing 0.55% higher.

Electronics veteran Sony was down 1.97%, clawing back some earlier losses after it said it had reached agreement to buy Mubadala Investment’s share of EMI Music Publishing in a deal worth $1.9bn.

On the mainland, the Shanghai Composite eked out gains of 0.02% to 3,214.53, and the smaller, technology-heavy Shenzhen Composite added 0.38% to 1,855.16.

Markets in South Korea and Hong Kong were closed for public holidays.

Developments on the trade front were atop the regional agenda, as Washington and Beijing continued their negotiations in a bid to prevent a trade war between the economic superpowers.

US Treasury secretary Steven Mnuchin told CNBC overnight taht the latest round of bilateral discussions had “made very meaningful progress”.

That followed comments on Sunday that a trade war between the two countries was “on hold” - rhetoric that lifted global sentiment on Monday.

Some market watchers were still peddling caution, however, warning that the rosy outlook was still subject to change.

“[Washington] could easily come back with accusations of insufficient change at a moment's notice, probably at a time when it suited them,” noted ING chief economist Robert Carnell.

“The mid-term election in November for example.”

Oil prices were continuing to rise, with Brent crude last up 1% at $80.02 per barrel and West Texas Intermediate ahead 0.32% to $72.58.

In Australia, the S&P/ASX 200 slid 0.7% to settle at 6,041.90, with the big four banks leading the hefty financials subindex below the waterline, along with miners.

Australia and New Zealand Banking Group lost 1.59% in Sydney trading, while BHP was off 0.68%.

Across the Tasman Sea, New Zealand’s S&P/NZX 50 was down 0.03% at 8,613.32, led lower by infant food and specialist dairy product exporter A2 Milk, which lost 3%.

It was a mixed day for the down under dollars, with the Aussie last 0.12% stronger on the greenback at AUD 1.3174, while the Kiwi weakened 0.17% to NZD 1.4420.