Asian stocks are in decline as risk aversion flames burn brighter

• Risk-off market flows see Asian equities in decline across the board.
• Trade tariffs have yet to send stocks into decline as current sell-offs get fueled by Turkey contagion risks.

Asian equities are in full retreat for Monday's action with Chinese and Japanese indexes tumbling as trade fears kick into overdrive, with Turkey's currency in freefall while the US ramps up trade rhetoric against both China and Turkey as US President Donald Trump seeks to make things worse rather than better.

Turkey's Black Swan Friday

Risk appetite withdrew last week over fears of contagion from Turkey that threatens to spread throughout emerging markets and the European banking sectors, while trade tensions between the US and most of her major trading partners continue to edge higher with little stand-down on any side.

Japan's Nikkei 225 is off -1.34% with Tokyo Topix declining -1.5% for Monday, with Hong Kong's Hang Seng index is down -1.56% and Shanghai's CSI 300 index is back -0.95%; Australia's ASX 200 is fairing better, only down -0.5% for the day, while emerging market contagion has taken the MSCI broad Asia-Pacific excluding Japan index down -0.95%.

Nikkei 225 levels to watch

Japan's leading equity index is all the way back down just below 22,000.00, busting out the bottom of recent swing lows and leaving the way down clear to July's low of 21,460.00, while a recovery will be faced with stiff resistance at August's high of 22,800.00.