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Talking Points:

  • Most Asian markets fell, reacting to Friday’s US session where the USD gained
  • China announced anti-dumping duties on Japan, South Korea and South Africa
  • First day of G20 meeting to come, keep an eye out for protectionist discussions

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Most Asian stocks began on Monday trading in the red, having a chance to react to Friday’s US session where the US Dollar rose with local bond yields. A major catalyst appeared to be absent there and the price action was likely a result of more pre-positioning for this week’s Fed monetary policy announcement. Monday’s session started with developing stories out of the world’s second largest economy.

There, Lie Kun and Yi Gang were nominated for China’s Finance Minister and PBOC’s Governor respectfully during the National People’s of Congress meeting. Meanwhile, China’s Ministry of Commerce announced anti-dumping duties on methyl isobutyl ketone. These duties can range from 15.9% to 190.4% and were aimed at Japan, South Korea and South Africa.

Japan’s Nikkei 225 underperformed in this risk averse trading environment under the threat of what could eventually become a trade war. It fell as much as 0.8%. South Korea’s Kospi was also down as much as 0.56%. Meanwhile, things were looking brighter in China with the CSI 300 and Shanghai Composite shooting higher.

In the foreign exchange market, Bank of Japan’s ‘Summary of Opinions’ from its March interest rate decision hurt the Japanese Yen initially. However, the anti-risk fiat soon found itself buoyed by the stock selloff after Tokyo’s market open. Sentiment-linked currencies such as the New Zealand and Australian Dollars suffered.

Looking ahead over the next 24 hours, there aren’t any immediate critical event risks on the economic calendar. However, do keep an eye out for the first day of the G20 meeting that is taking place in Buenos Aires. There, finance ministers and central bank governors will converge and topics such as protectionism seem likely to come up given developments out of the US. There, the tariff grace period expires on Friday.

Nikkei 225 Technical Analysis

Asian Stocks Decline as China Announces Duties, G20 Meeting Due

The Nikkei 225 appears to be turning lower after breaking below a near-term rising support line. This occurred as negative RSI divergence signaled ebbing momentum to the upside. Immediate support appears to be the 23.6% Fibonacci retracement at 21,404 followed by the 14.6% minor level at 21,075. If prices turn higher, immediate resistance appears to be the 38.2% level at 21,937 followed by the 50% midpoint at 22,367.

Nikkei 225 Trading Resources

--- Written by Daniel Dubrovsky, Junior Currency Analyst for DailyFX.com

To contact Daniel, use the comments section below or @ddubrovskyFX on Twitter