* Asia ex-Japan, Nikkei post losses
* European stocks expected to open flat to lower
* Dollar continues slide as investors take shelter in yen
* U.S. 10-yr Treasury yields hit 5-wk low overnight
* Oil steady after losses on Libya output rebound
By Nichola Saminather
SINGAPORE, April 4 Asian shares inched lower on
Tuesday as caution reigned ahead of a potentially tense meeting
between U.S. President Donald Trump and his Chinese counterpart
Xi Jinping later this week.
The dollar lost ground after investors sold stocks
overnight and looked to safe havens as political uncertainty
overshadowed positive U.S. economic data and solid growth in
European markets were also set for a subdued start, with
financial spreadbetter CMC Markets predicting Britain's FTSE 100
will open 0.1 percent higher, and Germany's DAX
and France's CAC 40 will start the day flat.
MSCI's broadest index of Asia-Pacific shares outside Japan
fell 0.2 percent.
Japan's Nikkei slumped 1.1 percent as automakers
tumbled on weaker-than-expected U.S. sales and investors sought
out the safe-haven yen.
Toshiba Corp, the worst performer on the index,
tumbled 9.5 percent after sources said the company will meet
creditor banks on Tuesday to ask them to accept as collateral
shares in some of its businesses, including its soon-to-be
split-off memory unit, in exchange for not calling in their
Australian shares slid 0.3 percent after the central
bank voted to hold rates steady at a record low 1.5 percent as
expected, while pointing out that growth in household borrowing,
largely to buy housing, is outpacing increases in household
Earlier in the day, the statistics bureau reported an
expansion in the country's February trade surplus to more than
double the previous month's as exports of gold and minerals
rebounded, while imports dropped.
The Australian dollar was 0.3 percent weaker at $0.7585.
China, Hong Kong, Taiwan and India were closed for holidays.
Adding to market jitters was an attack by a suspected
Islamic suicide bomber on a metro train in St. Petersburg,
Russia, that killed 11 people and injured 45.
"Certainly a reaction had been seen towards the metro bomb
at St. Petersburg," Jingyi Pan, market strategist at IG in
Singapore, wrote in a note.
The meeting between Trump and Xi will also "have due
influence upon Asian markets and I would not be surprised if
traders choose to stay on the side-lines to ride out these
Overnight, U.S. stock indexes closed in the red, albeit
having recovered some of the day's losses, after Trump held out
the possibility of using trade as a lever to secure Chinese
cooperation against North Korea in an interview with the
Financial Times on Sunday.
Last week, Trump tweeted that the highly anticipated
meeting, which is also expected to cover differences over trade,
North Korea and China's strategic ambitions in the South China
Sea, "will be a very difficult one."
That has kept investors on edge, knocking riskier assets and
forcing investors into safe assets such as the yen, gold and
Data showing U.S. construction spending grew 0.8 percent to
$1.19 trillion, the highest since April 2006, failed to provide
a sustained boost in sentiment, while a deceleration in U.S.
auto sales in March reinforced investors' unease.
Manufacturers across Europe broadly and much of Asia had
solid growth in March, making for a strong quarter overall,
business surveys showed, but the rise of U.S. protectionism is
keeping both investors and companies wary.
European stock markets hit a 16-month high on Monday but
failed to hold on to the gains as risk aversion returned. The
pan-European STOXX 600 index closed down 0.5 percent.
The 10-year U.S. Treasury yield fell to 2.3318.
It touched a five-week low of 2.321 overnight.
"The dollar is feeling pressure against the yen from an
interest rate spread point of view," said Shin Kadota, senior
strategist at Barclays in Tokyo.
The dollar dropped 0.4 percent to 110.42 yen in its
third straight session of losses.
The dollar index, which tracks the greenback against
a basket of six trade-weighted peers, fell 0.1 percent to
100.43, despite touching a 2-1/2-week high in the previous
The euro was steady at $1.0672.
In commodities, crude failed to recover from overnight
losses on a rebound in Libyan output and an increase in U.S.
drilling rig capacity, both of which exacerbated concerns about
U.S. crude was unchanged at $50.24 a barrel, while
global benchmark Brent was flat at $53.13.
Gold prices hit a one-week high before pulling back a little
to trade 0.2 percent higher at $1,255.89 an ounce.
(Reporting by Nichola Saminather; additional reporting by
Shinichi Saoshiro; Editing by Shri Navaratnam and Kim Coghill)