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Asian stocks fall back in worst week since March, Japan's Nikkei 225 trying to keep ¥22,500

  • Equities mostly decline for Friday as risk aversion continues to take chunks out of market sentiment.
  • A trigger-happy Fed sees further market fears set in as traders grapple with both rate hikes and a potential trade war.

Friday brings another cautious day for Asian stock markets, with equity indexes largely in the red for the day, with Japan's leading Nikkei 225 trading into the 22,500.00 handle as markets begin to shutter for the weekend.

Concerns over a brewing trade war between the US and China are continuing to sap bullish energy out of Asian equities, as Pacific-Asia indexe3s suffer their worst one-week declines since March's slide, which was also inspired by trade concerns sending shocks through risk markets.

Adding to selling pressure, the US Federal Reserve has begun to signal a faster clip to rate hikes to come for 2018, and the market hypothesis that the latest rate hike cycle for the Fed must be coming to a close appears to have been premature. The threat of rapidly rising interest rates is helping to push traders out of their bullish positions as fears of higher costs take hold.

Australia's ASX is down -0.14% for the day, with Hong Kong's Hang Seng sitting at -0.18%. Shanghai's Composite is bucking the bearish trend, up nearly 0.30% for the day, while Japan's Nikkei 225 is sitting at -0.85%.

Nikkei 225 levels to watch

Japan's Nikkei  index is struggling to keep a hold of the 22,500.00 level as the bourse continues to slide on risk aversion, and a continued slide will see the week's low at 22,114.00,  while bulls will be looking to take the index back over the last swing high at 22,780.00 before challenging last week's ceiling near the 23,000.00 key level.

Author

Joshua Gibson

Joshua joins the FXStreet team as an Economics and Finance double major from Vancouver Island University with twelve years' experience as an independent trader focusing on technical analysis.

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