18 July, 2017
A hawkish ECB could hurt Tokyo stocks as it could keep the dollar weak and lift the yen, as well as widen the gap between the European and Japanese bond yields, making it more hard for the BOJ to keep rates low.
Tempered expectations for Trump's spending plans weighed on European bond yields which edged lower, tracking USA equivalents, after the collapse of the second healthcare bill.
The 225-issue Nikkei Stock Average lost 118.95 points, or 0.59 percent, from Friday to close the day at 19,999.91, dropping below the 20,000 line and marking the index's lowest close since July 7.
The Australian dollar traded at $0.7795, after having hit a two-year high of $0.7840 on Monday, supported by data showing robust economic growth in China.
South Korea's Kospi was up 0.29% as the benchmark index edged away from the 2,430 level. The implosion leaves the divided GOP with its flagship legislative priority in tatters. Hong Kong's Hang Seng climbed 0.2 percent to 26,524.94, while the Shanghai Composite added 0.4 percent to 3,187.57.
ANALYST TAKE: "The dollar doesn't actually care about the health care bill specifically, but rather what it means for Trump's ability to get anything done, something that could come to affect his infrastructure and tax plans down the road", said Connor Campbell, financial analyst at Spreadex.
Elsewhere in Europe, stocks struggled with European shares off 0.4 percent as a set of disappointing results from the likes of Ericsson and Lufthansa soured the mood. "Gold has picked up its allure again given the heightened political risk landscape".
The European Central Bank is expected to keep its policy on hold at its rates review on Thursday while many investors expect it to signal a reduction of its stimulus in the following policy meeting in September.
ENERGY: Benchmark U.S. crude lost 11 cents to $45.91 a barrel in electronic trading on the New York Mercantile Exchange. It lost 52 cents, or 1.1 percent, to $46.02 a barrel in NY.
CURRENCIES: The dollar has been weakening as investors conclude the US government is unlikely to enact a significant infrastructure spending package to boost the economy.
Brent crude futures eased 0.1 percent to $48.35 a barrel while USA crude oil fell 0.2 percent to $45.93. The euro was up 0.7 percent at $1.1554 while the dollar fell 0.5 percent to 112.04 yen. The euro rose to $1.1516 from $1.1460.
