© Reuters. FILE PHOTO – Visitors look at a stock quotation board at Tokyo Stock Exchange in Tokyo

By Shinichi Saoshiro

TOKYO (Reuters) – Asian stocks slipped on Thursday after cautious comments from U.S. Trade Representative Robert Lighthizer dented some of the recent optimism toward Sino-U.S. trade relations, while the dollar held gains, supported by higher bond yields.

MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.1 percent.

Australian stocks fell 0.1 percent, South Korea’s shed 0.5 percent and Japan’s lost 0.5 percent.

Global equities scaled a four-month high earlier this week helped by upbeat expectations toward U.S.-China trade talks. On Wednesday, however, they dipped after Lighthizer said it was too early to predict an outcome in talks between Washington and Beijing.

“Lighthizer’s comments trimmed a bit of the trade resolution hopes which had grown recently, and equities are exposed to some downward pressure,” said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management.

“As for tensions between India and Pakistan, it is a concern. But it remains a regional topic for the moment and the overall market impact has been limited thus far.”

The conflict between India and Pakistan heated up after both said on Wednesday that they shot down each other’s fighter aircraft.

In currency markets, the against a basket of six major currencies stood little changed at 96.085.

The index had edged up 0.1 percent overnight, when it managed to pull away from a three-week trough as Treasury yields rose ahead of the U.S. fourth-quarter gross domestic report release.

The greenback traded at 110.865 yen, having bounced back from a low of 110.355 brushed momentarily on Wednesday as tensions between India and Pakistan flared.

The Japanese currency often attracts demand in times of political tensions and market turmoil.

The euro was a shade higher at $.1.1377 after slipping 0.15 percent overnight.

The pound stood close to a near eight-month peak of $1.3351 reached the previous day. Sterling has rallied this week as investors ramped up bets that a no-deal Brexit was less likely and that Britain’s departure from the European Union would be delayed.

oil futures were 0.07 percent higher at $56.98 per dollar, adding to gains from the previous day, when the contracts had surged 2.5 percent.

Crude rallied on Wednesday after U.S. inventories unexpectedly plummeted and as Saudi Arabia brushed aside comments from U.S. President Donald Trump seeking to keep oil prices from climbing.

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