Asian shares meander on worries over US-China trade talks

SINGAPORE — Asian markets were flat in subdued trading Wednesday as Japan reported weak export data and news surfaced of possible hiccups in China-U.S. trade talks.

KEEPING SCORE: Japan's Nikkei 225 index was less than 0.1 percent higher at 20,631.54 and South Korea's Kospi rose 0.3 percent to 2,123.92. Hong Kong's Hang Seng edged less than 0.1 percent higher to 27,021.90. The Shanghai Composite index likewise gained less than 0.1 percent to 2,581.62. Australia's S&P ASX 200 was flat at 5,856.70. Shares fell in Taiwan, Singapore and Indonesia but rose in Malaysia.

WALL STREET: U.S. investors returned from a holiday Tuesday to lower global growth forecasts by the International Monetary Fund and news that China's economy expanded last year at its slowest pace since 1990. Reports that the Trump administration recently rejected a meeting with Chinese trade officials caused major indexes to slip further. The S&P 500 index declined 1.4 percent to 2,632.90. The Dow Jones industrial average dropped 1.2 percent to 24,404.48 and the Nasdaq Composite was down 1.9 percent at 7,020.36.

JAPANESE TRADE: On Wednesday, Japan released weaker-than-expected trade data for December. The country said its exports fell by 3.8 percent from a year earlier, its largest drop in two years. It also posted its first full-year trade deficit since 2015. Imports climbed 1.9 percent in December, missing the market estimate of a 3.7 percent rise, and way below November's 12.5 percent surge. Weaker Japanese exports suggest that a slowdown in China, the world's second largest economy, is starting to have an impact on companies elsewhere that rely on it for business.

U.S-CHINA RELATIONS: Media outlets including the Financial Times and CNBC have reported that the White House turned down an offer by Chinese trade officials to meet in Washington this week, because of the lack of progress on matters like intellectual property theft. According to the reports, which cited unnamed sources close to the matter, the preparatory talks were meant to soften the ground before China's economy czar, Vice Premier Liu He and U.S. Trade Representative Robert Lighthizer meet on Jan. 30 and 31. White House economic adviser Larry Kudlow denied that, saying both sides are working toward the higher level talks.

ANALYST'S TAKE: "The U.S. strategy might be to raise pressure on the Chinese ahead of the hard deadline in March, but this makes for uncomfortable interpretation by markets, and could potentially induce excessive volatility in the interim," Chang Wei Liang of Mizuho Bank said in a commentary.

ENERGY: U.S. crude picked up 3 cents to $53.04 per barrel in electronic trading on the New York Mercantile Exchange. The contract closed $1.03 lower at $53.01 per barrel on Tuesday. Brent crude, used to price international oils, gained 7 cents to $61.57 per barrel. It dropped $1.24 to $61.50 per barrel in London.

CURRENCIES: The dollar strengthened to 109.69 yen from 109.37 yen late Tuesday. The euro rose to $1.1366 from $1.1361.

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Marley Jay contributed from New York.

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