Asia stocks slide on Dollar rebound, Nikkei falters at the ¥23,000 key level

• Asia equities are recoiling as a Greenback rebound leeches cash out of emerging markets.
• Monday's rally could prove short-lived as inflation concerns resume taking the top off of risk assets.

Asia shares turned largely lower in Tuesday's trading, with Japan's Nikkei 225 index down into 22,960.00 after hitting a new three and a half month high on Monday of 23,044.00.

Equities in Asia recoiled following Monday's broad market rally as the US Dollar strengthened, sapping flows from emerging markets and renewed inflation pressures for the US economy put pressure on inflation expectations as traders anticipate further rate hikes from the US Fed this year; the concerns ate away at the week's early recovery fueled by headlines that the US and China are improving their relationship, with both countries agreeing to avert any further tariffs as the two countries continue trade negotiations.

The Nikkei index is currently down 0.12% for Tuesday, while Australia's ASX has declined nearly 0.75%, with Shanghai's Composite off 0.40%. Hong Kong's Hang Seng index has escaped the pullback unscathed for now, and is up 0.60% on the day.

Nikkei levels to watch

While the Nikkei punched in a fresh high and crossed over the major 23,000.00 resistance level, the equity index couldn't hold the territory, and is falling back somewhat. The 23,000.00 major handle constrained prices last December, and a bearish turnaround from here to could easily fall to 21,500.00 and hit the 50.0 Fibo retracement level, assuming support from the 200-day SMA at 21,700.00 fails to hold.