TOKYO (Reuters) – Asian stocks trod water on Wednesday as concerns over the outlook for global economic growth and the ongoing Sino-U.S. trade war kept investors away from riskier assets.

Spreadbetters expected European stocks to open lower, with Britain’s FTSE losing 0.3 percent, Germany’s DAX slipping 0.2 percent and France’s CAC shedding 0.4 percent.

MSCI’s broadest index of Asia-Pacific shares outside Japan dipped 0.15 percent, stalling after climbing to a seven-week high on Monday.

The Shanghai Composite Index was last down 0.15 percent, having flitted in and out of the red.

Australian stocks lost 0.25 percent and Japan’s Nikkei shed 0.1 percent.

On Wall Street, the S&P 500, the Nasdaq and the Dow all posted their biggest one-day percentage drops since Jan. 3 on Tuesday.

Following a sharp drop in December, U.S. shares gained through much of January, supported in part by expectations for a thaw in U.S.-China trade tensions and a more dovish-sounding Federal Reserve. That also prompted global investors to plough into riskier assets.

But putting a dent on sentiment again was a report by the Financial Times that the Trump administration had rejected an offer from China for preparatory trade talks this week ahead of high-level negotiations scheduled for next week.

White House economic adviser Larry Kudlow denied the report, helping U.S. equities pare some losses though the fresh concerns about U.S.-China relations kept share prices in check.

Recently published data all pointed to a rough year ahead for the world economy.

U.S. home sales tumbled 6.4 percent in December, falling short of the weakest forecast, to their lowest in three years. Compared with a year earlier, they were down more than 10 percent for the first time since 2011.

House price increases slowed sharply, adding to evidence of a further loss of momentum in the housing market.

Canadian factory sales and wholesale trade both slumped more than expected in November, while in Germany a survey by the ZEW research institute showed morale among German investors improved slightly in January, but their assessment of the economy’s current condition deteriorated to a four-year low.

Japan’s exports and imports also fell short of market expectations, with exports posting their biggest fall in more than two years.

As expected the Bank of Japan kept monetary policy easy and trimmed its inflation forecast on Wednesday with the domestic economy facing headwinds.

“The downward revision to its inflation forecasts underlines that policy tightening remains a very distant prospect,” wrote Marcel Thieliant, senior Japan economist at Capital Economics.

The IMF trimmed its global growth forecasts for 2019 and 2020 on Monday, in its second downgrade in three months, just after China reported its 2018 growth slipped to the worst level in nearly three decades.

“Risk asset prices have been essentially supported just by easing of U.S. rate hike expectations,” said Shuji Shirota, head of macro-economics strategy at HSBC Securities.

“Economic data has been weak and the U.S. government shutdown should be hurting economic sentiment, but even that has been considered as positive for risk assets, on the grounds that they make it difficult for the Fed to raise rates.”

U.S. bond prices have found support, with the benchmark 10-year yield slipping to 2.744 percent from Friday’s peak of 2.799 percent, the highest since Dec. 27, with money market futures pricing out any chance of a Fed rate hike this year.

The euro was a shade higher at $1.1368 but remained in close reach of a three-week low of $1.1336 set on Tuesday, weighed by recent weakness in the euro zone economy and worries about fallout from Brexit.

The dollar rose 0.25 percent to 109.73 yen , recovering the previous day’s losses.

In commodities, U.S. West Texas Intermediate (WTI) crude futures managed to crawl up 0.17 percent to $53.1 per barrel after shedding 1.9 percent the previous day.