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    Asia stocks trade lower as investors await Fed rate decision

    Stocks in Asia traded lower Wednesday morning amid dampened expectations for a resolution to the U.S.-China trade war. Meanwhile, investors await the U.S. Federal Reserve's announcement of its decision on interest rates, set to happen later on Wednesday stateside.

    The Nikkei 225 in Japan slipped 0.73% in early trade, with shares of index heavyweight Fast Retailing declining 1.5%. The Topix index also fell 0.61%.

    South Korea's Kospi traded fractionally lower, with shares of industry heavyweight Samsung Electronics shed 0.21% after the company reported a 56% plunge in its second-quarter profit as compared to a year ago.

    Over in Australia, the S&P/ASX 200 slipped 0.23% as the sectors traded mixed.

    China is set to release its official manufacturing Purchasing Managers' Index for July at 9:00 a.m. HK/SIN.

    Australian inflation data for the month of June is also set to be released later on Wednesday at 9:30 a.m. HK/SIN.

    Asia-Pacific Market Indexes Chart

    Overnight on Wall Street, the Dow Jones Industrial Average closed 23.33 points lower at 27,198.02, while the S&P 500 shed 0.3% to end its trading day at 3,013.18. The Nasdaq Composite declined 0.2% to close at 8,273.61.

    The moves downward came as U.S. President Donald Trump said in a series of tweets Tuesday that China is not keeping its promise of buying more U.S. agricultural products. For its part, China insists that it has bought U.S. agricultural products.

    Trump's comments come as U.S.-China trade talks are happening in Shanghai from July 30-31, as the two economic powerhouses aim to reach a deal to end a protracted trade war that has seen both parties slap tariffs on billions of dollars worth of each other's goods.

    Meanwhile, the Fed is set to deliver its decision on interest rates later Wednesday stateside, with expectations that it will cut interest rates by a quarter point. Investors will also look for clues from Powell about potential rate cuts later this year. Currently, traders are pricing in at least two rate cuts of 25 basis points before the end of the year, according to the CME Group's FedWatch tool.

    The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 98.041 after slipping from levels above 98.1 yesterday.

    "The Fed has given us zero reason to expect anything except a quarter point rate cut so the change in interest rates will be the least market moving part of the (Federal Open Market Committee) announcement," Kathy Lien, managing director of foreign exchange strategy, wrote in a note.

    "Instead, US dollar traders should be focused on the votes and forward guidance," Lien said.

    The Japanese yen, often seen as a safe-haven currency, traded at 108.51 against the dollar after strengthening from levels above 108.8 in the previous session. The Australian dollar changed hands at $0.6873 after slipping from the $0.690 handle yesterday.

    Here's a look at what's ahead today:

    • China: Official Purchasing Managers' Index for July at 9:00 a.m HK/SIN
    • Australia: Consumer Price Index for June at 9:30 a.m. HK/SIN
    • Japan: Consumer confidence for July at 1:00 p.m. HK/SIN
    • Japan earnings: Nomura, Mizuho Financial, Mitsubishi UFJ Financial Group, Daiwa Securities, Mitsui, Panasonic

    — CNBC's Fred Imbert contributed to this report.

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