*

Japan shares lead losses as traders fret over potential

auto

levies

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

Tuesday's low

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New Zealand dollar rebounds after RBNZ opts for 50 bp rate

cut

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Oil slips further as market contemplates MidEast ceasefire

impact

By Kevin Buckland

TOKYO, Nov 27 (Reuters) - Asian stocks were heavy on

Wednesday as investors fretted over what 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.

The loonie and peso remained weak following sharp drops to

multi-year lows on Tuesday, while the yuan edged back towards

the previous session's four-month trough.

Australia's dollar, which is often used as a liquid proxy

for the yuan given China is the country's biggest trading

partner, also inched back towards Tuesday's four-month low.

However, the New Zealand dollar rebounded from its own

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 was a stand-out underperformer again

on Wednesday, declining 0.9%. The autos sector was the

worst-performing industry group on the Tokyo Stock

Exchange, dropping more than 3% as both the threat of tariffs

and the drag of a stronger yen weighed on the profit outlook.

Taiwanese stocks lost 0.2%, while South Korea's

KOSPI rose less than 0.1%, struggling to bounce back

from Tuesday's 0.6% slide.

Mainland Chinese blue chips sank 0.4%, although

Hong Kong's Hang Seng managed a 0.1% rise.

MSCI's broadest index of Asia-Pacific shares

drooped 0.1%.

Weakness in Asian equities contrasts with gains for all

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

futures pointed to a further 0.1% advance.

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 7.2650 per dollar in offshore

trading, heading back toward the low of 7.2730 seen on

Tuesday.

The Mexican peso edged down to 20.7000 per dollar,

approaching the overnight trough at 20.8350.

Canada's loonie also edged lower, though at C$1.40695 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 $1.0835 per euro and easing slightly to

$1.25725 against sterling. It slipped 0.2% to 152.70

yen, after earlier reaching its weakest since Nov. 10 at 152.50

yen.

U.S. short-term Treasury yields edged lower to 4.2458%,

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.

With the dust settling after the initial market frenzy

following Trump's tariff threat, "investors seems to view this

as more tactical rather than fundamental, but enough to trigger

risk off ahead of the long weekend," said Shinji Ogawa, head of

Japan cash equities sales at J.P. Morgan.

The New Zealand dollar added 0.4% to $0.5856, while

the Aussie eased 0.1% to $0.6469.

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% at $92,630.

Gold ticked up 0.2% to $2,637 per ounce.

Oil prices continued to tick lower as markets assessed the

potential impact of a ceasefire deal between Israel and

Hezbollah, ahead of Sunday's OPEC+ meeting.

Brent crude futures fell 8 cents to $72.73 a barrel,

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

$68.68 a barrel, down 9 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.