*

Japan shares lead losses as traders fret over potential

auto

levies

*

Mexican peso, Canada's loonie, yuan weaken back towards

Tuesday's low

*

New Zealand dollar rebounds after RBNZ opts for 50 bp rate

cut

*

Oil slips further as market contemplates MidEast ceasefire

impact

(Updates prices ahead of London markets open)

By Kevin Buckland

TOKYO, Nov 27 (Reuters) - Asian stocks fell on Wednesday

and currencies were volatile as investors fretted over whether

other countries could be targeted for tariffs under incoming

U.S. President Donald Trump, a day after he pledged new levies

on Canada, Mexico and China.

European equities looked set for a similar fate, with

Pan-European STOXX 50 futures losing 0.3%.

Canada's loonie and Mexico's peso remained weak following

sharp drops to multi-year lows on Tuesday, while China's yuan

edged back towards the previous session's four-month trough.

However, the New Zealand dollar rebounded from multi-month

lows after the country's central bank opted to cut interest

rates by 50 basis points on Wednesday, disappointing some in the

market who had bet on a bigger reduction.

The safe-haven yen extended its strong run, climbing to a

two-week high on the U.S. dollar, which was in turn weighed down

by sagging Treasury yields.

Japan's Nikkei declined more than 1%. The autos

sector was the worst-performing industry group on the

Tokyo Stock Exchange, dropping 3.6% as both the threat of

tariffs and the drag of a stronger yen weighed on the profit

outlook.

Taiwanese stocks lost 1.5%, while South Korea's

KOSPI dropped 0.8%.

However, mainland Chinese blue chips recovered

from early losses to rise by 0.7%, while Hong Kong's Hang Seng

added 0.5%.

MSCI's broadest index of Asia-Pacific shares

drooped 0.3%.

Weakness in Asian equities contrasted with gains for all

three of the major Wall Street bourses overnight. S&P 500

futures pointed to a flat reopen.

Trump posted on his Truth Social platform early in Asia's

Tuesday that he would immediately put a 25% tariff on all

products from Mexico and Canada upon taking office, and slap an

additional 10% tariff on goods from China. He said those levies

would remain until the countries clamped down on issues such as

illicit drugs and migrants crossing U.S. borders.

"The theme on the day has been to buy America, and for some

to begrudgingly open a Truth Social account, with confirmation

that headline risk and the communication channels for price

discovery in markets have officially evolved," said Chris

Weston, head of research at Pepperstone.

Compared with Trump's first time in office, "he is far more

prepared, has a clear game plan, and has the legal passage to

execute without constraint," Weston said. "Markets now expect

bold action ongoing, with the noise in markets officially

increasing even before inauguration."

The yuan weakened 0.1% to 7.2679 per dollar in offshore

trading, heading back toward the low of 7.2730 seen on

Tuesday.

The Mexican peso weakened to 20.6980 per dollar,

approaching the overnight trough at 20.8350.

Canada's loonie also edged lower, though at C$1.4076 versus

its U.S. peer, there was more cushion from the knee-jerk low of

C$1.4178 seen in the previous session.

The U.S. dollar was more mixed against other major rivals,

edging up to $1.04765 per euro and easing slightly to

$1.2570 against sterling. It slid 0.5% to 152.34 yen,

after earlier reaching its weakest since Nov. 8 at 152.25 yen.

U.S. short-term Treasury yields edged lower to 4.2416%,

extending this week's pullback from Friday's nearly four-month

peak at 4.3810%.

Trading across markets is thinner than usual this week with

the U.S. Thanksgiving holiday on Thursday, and many investors

extending their break into Friday. Traders are also keeping an

eye on a reading of the Federal Reserve's preferred inflation

gauge, the PCE deflator, due later on Wednesday.

"We need to remember from (Trump's) first term, these agenda

are changeable depending on how the policy priorities change,

and what he can get in terms of the negotiations with various

countries," said Keiko Kondo, head of multi-asset investments

for Asia at Schroders, adding that based on the firm's

estimates, nearly 40% of Trump's promises during his time in

office were not delivered.

"We just need to sort of wait and see."

The New Zealand dollar added 0.5% to $0.58635.

Leading cryptocurrency bitcoin attempted to find its

feet after a four-day retreat from a record high of $99,830. It

was last up 1.5% at $93,037.

Gold ticked up 0.3% to about $2,640 per ounce.

Oil prices stabilized as markets assessed the potential

impact of a ceasefire deal between Israel and Hezbollah, ahead

of Sunday's OPEC+ meeting.

Brent crude futures rose 5 cents to $72.86 a barrel,

while U.S. West Texas Intermediate crude futures were at

$68.79 a barrel, up 2 cents.

Both benchmarks started the week with declines of more than

$2 following multiple media reports that the warring sides had

agreed to terms of a ceasefire.