Investors seek safety amid US-China spat

Asian stocks are wobbling as trade frictions between the US and China continue to spook markets.

Asian stocks sit on shaky ground as relief over Washington's temporary relaxation of curbs against China's Huawei failed to offset deeper worries about trade frictions between the world's two largest economies.

MSCI's broadest index of Asia-Pacific shares outside Japan on Wednesday edged up following gains on Wall Street, but was last down 0.15 per cent.

Australian stocks slipped 0.25 per cent, South Korea's KOSPI fell 0.45 per cent and Japan's Nikkei edged up 0.05 per cent.

"Some in the markets will continue to cling on to hopes of the United States and China reaching an agreement at the upcoming G20 meeting," Masahiro Ichikawa, Sumitomo Mitsui DS Asset Management senior strategist, said.

"But the ongoing trade conflict looks to be a protracted one, and its potentially negative impact on various economies is becoming a running concern."

The US Commerce Department on Monday granted Huawei Technologies Co Ltd a licence to buy US goods until August 19, a move intended to give operators relying on Huawei time to make arrangements.

The US blocked Huawei from buying US goods last week on national security grounds, a major escalation in the trade war against China.

Shares of technology companies helped lift Wall Street on Tuesday after Washington's easing of curbs on Huawei. Chipmakers, many of which sell to Huawei, had been hit at the start of the week.

The dollar traded at 110.580 yen after popping up to a two-week high of 110.675 against the safe-haven Japanese currency. The greenback was also supported as US yields rose in the wake of gains by Wall Street shares.

The pound was steady at $US1.2708 ($A1.8458) after sinking to a four-month low on Tuesday on the back of Brexit worries.

The Australian dollar, sensitive to shifts in risk sentiment, slipped 0.15 per cent to $US0.6873. The currency had suffered losses the previous day when the country's central bank governor said interest rates might be cut next month.

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