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Although Asian shares started the week on a much more positive territory led about by investor confidence regarding any upcoming US trade and economic policies and its effect on global growth, stocks in the region are now skittish on the looming meeting between U.S. President Donald Trump and Chinese President Xi Jinping this week.

The rally at the beginning of the week which was supported by market optimism regarding a rising global economy while South Korea’s March trade data confirmed the speculation with the country’s exports rising at a much faster rate.

Jittery Asian Stocks

By Tuesday Asian shares have lost ground as the markets took caution on any potential effect of the upcoming meeting between Trump and Jinping.

Investors who switched to safe haven assets on the rising political uncertainty have left major currencies such as the US dollar as the markets await another set of US data later this week.

Japan’s Nikkei lost around 1.1% with the automobile sector delivering the most losses due to a missed sales reports in the U.S and investors moving to the safe-haven yen. Among the worst performers included Toshiba Corp which dropped 9.5% on company reports that it will meet with creditor banks to propose the acceptance of collateral shares in some of its businesses.

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The Aussie also lost 0.3% to $0.7585. Australian shares also lost 0.3% on the central bank’s decision to hold rates at a 1.5% steady rate and as expected given the household borrowing growth is exceeding household income increases.

Despite the decline, The MSCI Asia Pacific Index which rallied by 9% from January until the end of March is set to stabilize the same to that in 2012 and is currently up by 0.2% on Monday in Hong Kong.

Trump-Xi Meeting

The meeting between the two leaders this week is expected to influence and affect the Asian market and expected to keep traders on the sidelines of Asian assets.

Investors who are now awaiting the outcome of the meeting and is expected to reveal the plans of the leaders regarding the relationship between the two countries in the coming months. Despite investor hope regarding the outcome of the meeting, Trump tweeted last week that a very difficult meeting would take place referring to China’s recent negative impact in the US economy with the country’s rising manufacturing jobs and production as Trump is keen on keeping American companies production mainly inside the country.

China, on the other hand, has remained bullish on the outlook of the upcoming meeting and is looking forward to a successful outcome according to Vice Foreign Minister Zheng Zeguang.

Other analysts also believe that Xi will be able to come back to his home country successfully and will be able to receive agreement regarding Trump’s recent comments on the country’s trade practices.

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