Asian stocks turn lower, snapping Nikkei’s long winning streak

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Most Asian stocks ended lower Thursday. Early gains inspired by U.S. markets, where stocks got a boost from a Federal Reserve report that painted a rosy picture of the U.S. economy, faded.

The Fed’s Beige Book, a collection of anecdotal account of business conditions, showed that 11 of the 12 districts surveyed were expanding at a “modest” or faster pace.

Japan’s Nikkei NIK, -0.13%  ended down 0.1%, unable to retain early gains. The loss snapped what would have been a streak of five straight gains, the longest winning spree since April.

The country’s trade surplus soared 67% to 721.4 billion yen ($6.4 billion) in June thanks to strong demand for semiconductor chips and chip-making equipment from China offset a drop in car sales to the U.S., Dow Jones Newswires reported.

“Today’s trade data show a renewed plunge in imports in June and suggest that net trade continued to support gross domestic product growth in the second quarter,” said Marcel Thieliant, senior Japan economist at Capital Economics, in a note.

Korea’s Kospi SEU, -0.34%  trimmed early gains to end down 0.3%. Australia’s S&P/ASX 200 XJO, +0.28%  climbed 0.2% and Taiwan’s Taiex Y9999, -0.07%  saw its early gains fade into a finish at down 0.07%.

Shanghai Composite SHCOMP, -0.53%  bucked the trend in the region to slide 0.5% while Hong Kong’s Hang Seng HSI, -0.38%  fell 0.3%.

China’s currency hit lows not seen since last July, and the gap between onshore and offshore rates widened, suggesting greater pessimism among foreign traders.

The yuan has been hurt by a worsening trade conflict between the U.S. and China, and expectations that Beijing will ease monetary policy, while the Federal Reserve is likely to keep raising U.S. borrowing costs.

On Thursday morning, the People’s Bank of China set the dollar’s daily reference rate at 6.7066 yuan, weakening the yuan by 0.2%. The central bank allows the currency pair to move as much as 2% above or below that level onshore, while trading in other financial centers is unrestricted.

In subsequent trading, the currency fell as much as 0.6% to 6.7534 per dollar in the mainland, and by a similar proportion in the Hong Kong offshore market to 6.7861 per dollar, both levels not seen since July 2017.