SYDNEY (Reuters) - Asian shares started flat on Monday as U.S. President Donald Trump kept up his twitter war with China over trade just a couple of days before President Xi Jinping gives a keynote speech on his policy priorities.
Soothing tensions a little was news North Korea had told the United States for the first time that it was prepared to discuss denuclearization when their leaders meet.
Also helping offset some of Friday’s retreat on Wall Street was an early 0.4 percent bounce in EMini futures for the S&P 500, while NASDAQ futures rose 0.5 percent.
As a result, losses across the region were minor with MSCI’s broadest index of Asia-Pacific shares outside Japan off just 0.05 percent.
Japan’s Nikkei wavered either side of flat, and South Korea edged ahead by 0.1 percent.
Caution remained the watchword after Trump claimed on Sunday that China would take down its trade barriers because it was “the right thing to do.”
Trump late Thursday threatened to slap $100 billion more in tariffs on Chinese imports, while Beijing said it was fully prepared to respond with a “fierce counter strike”.
Analysts warned the drama would be a long-running one given the lengthy public discussion period on U.S. tariff proposals meant the earliest they might be imposed was somewhere around late July or early August.
“This is not going to happen tomorrow, and given the mercurial nature of the U.S. administration, the whole issue could well disappear before anything really happens,” said Marshall Gittler, chief strategist at ACLS Global.
“Many market participants may be starting to think that this is just a lot of sound