Japan's Nikkei share average fell to a 1-1/2-week low on Wednesday morning after US President Donald Trump stoked uncertainty over the outcome of US-China trade talks, while a stronger yen hurt exporters.

The Nikkei tumbled 1.2 per cent to 22,688.18 in midmorning trade, after sliding to 22,649.85 earlier, the weakest intraday level since May 11.

Trump had on Tuesday said he was not pleased with the recent trade talks between the United States and China, checking hopes that the world's two biggest economies were on course to hammer out a deal. US Treasury Secretary Steven Mnuchin has earlier said that trade war is “on hold”, sending the Nikkei over the psychologically important 23,000 level on Monday.

Trump's latest remarks followed Beijing's announcement that it would cut import tariffs for automobiles and car parts.

“I don't think we need to worry too much about trade war hitting the market harder than now because China is seen compromising as it tries to defuse trade tensions with the U.S.,” said Isao Kubo, equity strategist at Nissay Asset Management.

“That said, although investors do not expect that tension will deteriorate dramatically from the current state, there is still lingering uncertainty and that's keeping activity in check.”

Exporters were sold as the yen bounced against the dollar, with TDK Corp declining 2.1 per cent, Honda Motor Co shedding 1.3 per cent and Daikin Industries falling 1.8 per cent.

The dollar slipped 0.4 per cent against the yen to 110.49 yen , after touching a four-month peak on Monday. Shippers were also under pressure, with Mitsui OSK Lines and Kawasaki Kisen each dropping 2.8 per cent.

Nishimatsuya stumbled 5.9 per cent after the children's wear chain said its same-store sales in May dropped 8.3 per cent on the year, hit by bad weather after Japan's Golden Week holidays. The broader Topix skidded 0.8 per cent to 1,794.99.

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