Asian shares eased on Thursday, as investors showed caution over the outlook for global growth as they awaited the outcome of Sino-US trade negotiations, while the euro remained under pressure ahead of the European Central Bank meeting.
MSCI's broadest index of Asia-Pacific shares outside Japan edged 0.3 percent lower on Thursday, yet hovering not far from its five-month high marked last week, and was up 10 percent year-to-date. Japan's Nikkei average fell 0.7 percent.
Chinese stocks were mixed, with the Shanghai Composite rising 0.2 percent, while the blue-chip CSI 300 and Hong Kong's Hang Seng shed 1.0 percent and 0.7 percent, respectively.
European shares were expected to open lower, with financial spread-betters seeing Britain's FTSE, France's CAC and Germany's DAX each ticking down between 0.2 and 0.5 percent.
Overnight, Wall Street's main indexes fell for a third session, with the S&P 500 posting its biggest one-day decline in a month, as investors sought reasons to buy after the market's strong rally to start the year.
"For some time, markets had been pricing in good news, namely that the talks between the US and China will likely go well," said Tatsushi Maeno, senior strategist at Okasan Asset Management. "Now markets are having a pause."
Adding to concerns about the talks was data that showed the US goods trade deficit surged to a record high in 2018 as strong domestic demand pulled in imports, despite the Trump administration's "America First" policies aimed at shrinking the gap.
Other US data out on Wednesday suggested some slowing in the labour market, though the pace of job gains remains more than enough to drive the unemployment rate down.
The ADP National Employment Report showed private payrolls increased by 183,000 in February after surging 300,000 in January. Economists polled by Reuters had forecast private payrolls advancing 189,000 in February.
The government's more comprehensive employment report for February is scheduled for release on Friday.
Also weighing on investor sentiment were broader concerns about growth after the Organization for Economic Co-Operation and Development cut forecasts again for the global economy in 2019 and 2020.
"Chinese macroeconomic data remains weak at the moment but I expect them to improve by the middle of the year," said Okasan's Maeno.
Investors are now looking ahead to the ECB's board meeting later on Thursday. The central bank is expected to slash growth forecasts and give its strongest signal yet that fresh stimulus is coming in the form of more cheap loans.
In the currency market, the euro traded at $1.1304, hovering near a two-week low on expectations that the ECB could suggest offering cheap long-term loans for banks.
The loans, known more formally as Targeted Long-Term Refinancing Operations (TLTROs), are expected to boost troubled eurozone lenders.
"The euro has come under pressure in anticipation of the ECB's policy meeting, with many traders expecting a dovish tilt from the central bank," said Yunosuke Ikeda, chief forex strategist at Nomura Securities.
"I think ECB could hint that it is mulling a fresh round of TLTROs, but expect the bank will make no changes to its forward guidance and repeat that rates would remain at present levels at least through the summer."
The dollar was little changed at 111.74 yen, moving away from Tuesday's 2-1/2-month peak of 112.135, while the dollar index, which measures the greenback against a basket of six of its peers, barely moved at 96.887.
The Canadian and Australian dollar sank to two-month lows on Wednesday as traders scaled back holdings on expectations policy-makers would leave interest rates alone in the foreseeable future or even lower them to counter their softening economies.
Adding to the Aussie's woes on Thursday was data showing local retailers suffered another bleak month in January, in a sign overall economic momentum was slowing. The Aussie dollar last changed hands at $0.7042, up 0.1 percent on the day.
Oil edged up on Thursday amid ongoing OPEC-led supply cuts and US sanctions against exporters Venezuela and Iran, although prices were prevented from rising further by record US crude output and rising commercial fuel inventories.US crude futures rose 0.1 percent to $56.29 per barrel, moving closer to its 3-1/2-month high of $57.88 touched Friday, while international benchmark Brent futures gained 0.3 percent to $66.20 per barrel.