Asian stocks dip on caution ahead of Trump-Xi meeting

• Asian stocks drop as Trump-Xi meeting nears.
• President Trump's adviser Kudlow damped expectations of US-China trade truce.

Asian stocks are flashing red this Friday morning as investors seem to have turned cautious ahead of this weekend's meeting between the US President Trump and his Chinese counterpart Xi Jinping.

At press time, Japan's Nikkei index is down 0.64% at 21,202 and the Shanghai Composite is trading at 2,963, representing 1.10% losses on the day.

Stocks in Australia, Hong Kong and South Korea are also reporting losses, while those in New Zealand are up 0.40%. Meanwhile, the futures on the S&P 500 are flat lined, having registered 0.35% gains on Thursday.

South China Morning Post reported during Thursday's Asian trading hours that the US and China have tentatively agreed to another truce in their trade war, in order to make way for negotiations. The optimism, however, faded after President Trump's economic adviser Larry Kudlow said there are no set preconditions for the meeting on the sidelines of the G20 on Saturday and that additional US tariffs on Chinese goods could still go ahead.

Kudlow's comments seem to have forced investors to scale back their expectation of a breakthrough in US-China deadlock.

With equities under pressure, the anti-risk Japanese Yen is better bid against most majors. The USD/JPY pair is currently trading at 107.63, down 20 pips from the session high of 107.83.

Meanwhile, gold is trading at $1,420 per Oz, representing 0.74% gains on the day.