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SYDNEY (Reuters) - Asian share markets faltered on Wednesday as simmering fears of a Sino-U.S. trade war overshadowed a bounce on Wall Street and left investors reluctant to take positions in anything.

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A board displaying stock prices is seen at the Australian Securities Exchange (ASX) in Sydney, Australia, February 9, 2018. REUTERS/David Gray

Safe-haven bonds, gold and the yen had run into selling as Wall Street benefited from bets that President Donald Trump’s Twitter attacks on Amazon would not translate to actual policy.

Yet trade worries weren’t far away. Late on Tuesday, the Trump administration announced 25 percent tariffs on $50 billion of annual imports from China, covering around 1,300 industrial technology, transport and medical products.

China’s commerce ministry immediately warned it was preparing countermeasures of equal intensity.

“The largest concern remains whether this trade tension could further escalate, but history suggests negotiation is likely to follow,” said Tai Hui, chief market strategist for Asia Pacific at J.P. Morgan Asset Management.

“That would provide some much needed short term relief to investors and allow them to focus back on economic and corporate fundamentals, which are still in decent shape.”

For now, caution was the watchword and MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was wavering either side of flat.

Japan's Nikkei .N225 added 0.1 percent in thin volumes, while South Korea .KS11 eased 0.2 percent. EMini futures for the S&P 500 ESc1 also dipped 0.2 percent.

Wall Street had rallied on Tuesday as investors looked forward to earnings season and the S&P 500 pushed above a key support level. The Dow .DJI ended up 1.65 percent, while the S&P 500 .SPX gained 1.26 percent and the Nasdaq .IXIC 1.04 percent.

Amazon.com shares (AMZN.O) bounced 1.5 percent on reports the White House would not take action even as Trump continued his attacks on the online retailer.

FACTORIES FADE A LITTLE

The swing in risk sentiment sucked some strength out of bonds, with yields on U.S. 10-year Treasury debt US10YT=RR up five basis points overnight to 2.78 percent.

The Japanese yen also edged back, with the dollar rising to 106.50 JPY= from a low of 105.70 on Tuesday. The euro hovered at $1.2275 EUR=, after easing from a top of $1.2335 overnight, while the dollar index was a fraction lower at 90.109 .DXY.

The Canadian dollar CAD= held firm after hitting a nearly five-week high as investors grew more optimistic about the prospect of a NAFTA trade deal.

Investors also seemed to be keeping their nerve on the global economic outlook after a host of manufacturing surveys (PMIs) showed some slowing, but from lofty levels in many regions.

“If global PMIs slow and avoid overheating concerns, that is good for risk appetite. If they slow for “the wrong reasons” like trade protectionism, that is much more worrying,”

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