Fear of prolonged trade war weighs on Asia stocks; bonds are collected by Reuters

© Reuters. A man looks in front of an electronic board showing stock information at a brokerage house in Nanjing

By Shinichi Saoshiro

TOKYO (Reuters) – Asian stocks tracked losses on Wall Street on Thursday when the latest exchanges between Beijing and Washington signaled the increase the risk of a prolonged trade war, which gives the investor's concerns about the impact on global economic growth.

European equity prices were higher in early trading and trimmed some losses after falling sharply in the previous day. The Pan region was up 0.46%, German edge up 0.34% and futures got 0.25%.

"We are opposed to a trade crisis but are not afraid of a trade war. This kind of deliberately challenging trade disputes is naked economic terrorism, economic chauvinism, economic bullying," said Chinese Deputy Minister Zhang Hanhui when asked about trade war with the United States.

His comments followed reports from Chinese newspapers that Beijing could use rare earths to strike back in Washington after US President Donald Trump noted that he was not ready to make an agreement with China on trade.

As Investors Turned Out of shares, property objects found as government bonds benefited, with returns on German reference amount approaching record laws.

It fell 0.7% and Hong Kong lost 0.4%.

Japan's decline was 0.5% and Australian shares hid 0 , 85%.

MSCI's broadest index of Asia-Pacific shares outside Japan is blamed for a new four-month low before the fine stock markets are in the midst of pricing in a long-term trade war. with participants who shape their portfolios pending a long-term conflict, says Soichiro Monji, senior Strategist at Sumitomo Mitsui DS Asset Management.

"The upcoming G20 summit could provide markets relief, as the US and China could use the event to start negotiating again."

The G20 meeting is set for June 28-29 in Japan.

Observers elsewhere expressed less optimism towards the G20 meeting.

"It seems to us that a Trump-Xi sideline meeting of the G20 meeting is more desirable than hard political reality," wrote Marc Chandler, market democrat in Bannockburn Global Forex. "This is a moment that defines before and after."

For flight-to-security, Germany's 1[ads1]0-year bond yield fell to a three-year decline of minus 0.179% overnight. A drop below minus 0.200% set in 2016 would take the return to record low.

Spanish and Portuguese 10-year returns fell to record low as deeply negative German Bund dividends have urged investors to look elsewhere for returns. [GVD/EUR]

It stood at 2,267% after falling to a 20 month low of 2,210% on Wednesday.

Despite lower government bonds, it was against a basket of six major currencies steady at 98,085 and in range of a two-year peak at 98,371 seen last week, with the greenback as a safe haven.

The euro was a shade higher at $ 1.11137, withdrawing slightly after three consecutive days of loss.

The dollar was slightly changed at 109,660 yen after leaping back from a two-week low of 109,150 brushed on Wednesday.

Oil prices rose modestly after an industry report showed a decline in inventories that exceeded analysts' expectations.

The increase followed volatile trading on Wednesday when oil prices fell to nearly three months of downturns at a time when trade war fear caught commodity markets.

U.S. Raw futures were up 0.66% at $ 59.20 a barrel after brushing $ 56.88 the previous day, their lowest since March 12.

0.37% to $ 69.71 per barrel.

Trade problems have weighed on oil, but supply constraints related to the oil company's production downturn and political tensions in the Middle East have provided some support.

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