Asia Mixed on Yuan Controversy

Asia Pacific stocks traded mixed on Wednesday as investors kept a close watch on the Chinese yuan amid an escalating trade dispute between the U.S. and China.

The Nikkei 225 in Japan dropped 68.75 points, or 0.3%, to 20.516.56, with index heavyweight and robot maker Fanuc shedding 1.6%.

SoftBank Group shares slid 0.23%. After market close, the Japanese conglomerate reported quarterly operating income for the three months that ended June 30: It fell 3.7% on-year to 688.8 billion yen ($6.49 billion U.S.) but it still beat analysts’ expectations. Operating income from SoftBank’s Saudi-backed Vision Fund and Delta Fund rose almost 66% to 397.6 billion yen for the quarter.

The Japanese yen traded at 106.19 against the U.S. dollar after earlier touching a low of 106.47.

In Hong Kong, the Hang Seng Index arrested its losing streak and took on 20.79 points, or 0.1%, to 25,997.03.

Hong Kong-listed shares of Chinese electric vehicle maker BYD dropped more than 5% after the company reported that its July sales volume fell about 17% compared to a year earlier. The firm’s Shenzhen-listed shares slipped 1.1%

Korean shares were down as shares of industry heavyweight Samsung Electronics slipped 0.7%.

The Australian dollar changed hands at $0.6716, falling from an earlier high of $0.6782.

The New Zealand dollar dived more than 1.5% to change hands at $0.6404 after the country’s reserve bank surprised markets and slashed its official cash rate by 50 basis points, to an all-time low of 1%.


In Shanghai, the CSI 300 fell 14.9 points, or 0.4%, to 3,621.43.

The People’s Bank of China (PBOC) set the the official midpoint reference for the yuan at 6.9996 per dollar, which was slightly weaker than market expectations. China’s central bank allows the exchange rate to rise or fall 2% from that number.

The onshore yuan changed hands at 7.0397 per dollar. Its offshore counterpart, which last traded at 7.0725 against the dollar, is used by foreign investors and banks.

The yuan broke a closely watched level of 7 against the dollar on Monday, sending markets across the globe into a frenzy and leading the U.S. Treasury Department to label China as a currency manipulator.

For its part, the PBOC rejected the U.S. Treasury’s claims on Tuesday, saying that the "United States disregards the facts and unreasonably affixes China with the label of ‘currency manipulators,’ which is a behavior that harms others and oneself."

Those moves came after U.S. President Donald Trump unexpectedly announced late last week that fresh tariffs would be slapped on additional Chinese exports from Sept. 1, intensifying the trade war between Beijing and Washington.
In other markets

In Korea, the Kospi index faded 7.79 points, or 0.4%, to 1,909.71

In Singapore, the Straits Times Index regained 14.22 points, or 0.5%, to 3,184.69

In Taiwan, the Taiex Index let go of 8.57 points, or 0.1%, to 10,386.18

In New Zealand, the NZX 50 recovered 199.09 points, or 1.9%, to 10,786.26

In Australia, the ASX 200 recouped 41.37 points, or 0.6%, to 6,519.46