LONDON/TOKYO - European stocks fell on Wednesday, while the US dollar was slightly higher, as nervy traders awaited clarity on President Donald Trump's trade policy ahead of a new round of tariffs next week.

European stocks turned negative after making slim gains in early trading, and were last down 0.5 percent. Still, they remain on track for their best quarter in two years, on hopes that a German spending package could spur growth.

Traders clung on to hopes of flexibility from the White House after Trump said on Monday that not all trade levies would come on the April 2 deadline, and some countries would get breaks, without providing further details.

At the same time, Trump opened a new front in his trade war with a directive for 25 percent secondary tariffs on any country that buys oil or gas from Venezuela. In turn, oil prices rose, although the impact was offset by relief from Black Sea maritime security deals struck by the US in the conflict in Ukraine.

Meanwhile, the US dollar index, which measures the currency against a basket of six major peers, inched higher after slipping 0.1 percent on Tuesday, its first losing session in about a week.

The index plumbed a five-month low last week, weighed down by worries that Trump's trade war could trigger a US recession. Data overnight showed consumer confidence plunged to the lowest level in more than four years this month.

Wall Street was set to open flat, futures gauges showed. The S&P 500 squeezed out a 0.16 percent gain on Tuesday.

"Market is in a wait and watch mode for tariff announcements," wrote Mohit Komur, chief Europe economist at Jeffries. "Investor sentiment is already on the negative side. If tariffs are not as bad as feared, it could serve as a clearing event and be positive for risky assets."

Earlier, Japan's Nikkei advanced 0.7 percent, and South Korea's KOSPI climbed 1.1 percent.

British focus

The British pound weakened after data showed British inflation slowed to an annual rate of 2.8 percent in February from 3 percent a month earlier, also slightly below market expectations.

British markets are in focus on Wednesday, with Finance Minister Rachel Reeves set to announce cuts to her spending plans later in the day in an attempt to show investors that she can be trusted to fix the public finances as growth falters.

The pound was last down 0.4 percent on the dollar at $1.28965, having traded at $1.2940 immediately before the data. It also weakened on the euro, with the common currency up 0.4 percent at 83.67 pence.

Inflation was a dominant theme in Japan, too, where the Bank of Japan Governor Kazuo Ueda said that the BOJ had yet to sufficiently achieve its inflation target. Ueda also vowed to keep raising interest rates if stubborn rises in food costs lead to broader inflation.

The yield on 10-year Japanese government bonds rose to the highest since 2008.

"Governor Ueda's comment itself was balanced," said Shoki Omori, chief desk strategist at Mizuho Securities. "His speech was cautiously optimistic, leaving a leeway to hike."

Oil prices edged higher as the United States stepped up efforts to limit Venezuelan and Iranian oil exports. A bigger-than-expected drop in US crude inventories also lent support.

Brent crude futures gained 0.2 percent to $73.19 a barrel, while US West Texas Intermediate crude futures added 0.3 percent to $69.21 a barrel.