INSUBCONTINENT EXCLUSIVE:
TOKYO: Asian stocks edged up on Thursday on signs the United States and China were on track for a preliminary trade deal, though optimism
was tempered by the almost daily shifts in prospects for defusing the damaging tariff war now in its second year.
The fluid situation around
Sino-US trade negotiations has cast a pall on financial markets heading into Christmas, with major economies grappling under the weight of
weak exports, investments and corporate profits.
Investors were quick to latch on to a Bloomberg report on Wednesday that Washington and
Beijing are closer to agreeing how many tariffs would be rolled back in a "phase one" trade deal.
US President Donald Trump later said that
negotiations with China are going "very well," providing a boost to riskier assets and denting safe havens like the Japanese yen.
MSCI's
broadest index of Asia-Pacific shares outside Japan rose 0.3 per cent
Australian shares were up 0.9 per cent, while Japan's Nikkei stock index rose 0.81 per cent.
Trump's comments marked a reversal from
Tuesday when he roiled global markets by saying a trade deal may not come until after the 2020 US presidential election.
Analysts warn that
more market turbulence is possible given Sino-US negotiations are very fluid.
"We could be in for a bit of a rally in risk assets and
risk-on trades," said Shane Oliver, head of investment strategy and chief economist at AMP Capital Investors in Sydney.
"My base case
scenario is the two sides reach some deal
The pressure for a deal is immense simply because of the economic slowdown in both countries
However, we see increased volatility because policy uncertainty has become a constant."
US stock futures fell 0.03 per cent on Thursday in
Asia after the S-P 500 gained 0.63 per cent on Wednesday.
The United States has imposed tariffs on Chinese goods in a 17-month long dispute
over trade practices that the US government says are unfair
China has responded in kind with its own tariffs on US goods.
If both sides cannot reach an agreement soon, the next important date to watch
15, when Washington is scheduled to impose even more tariffs on Chinese goods.
Traders are also bracing for the closely-watched US non-farm
payrolls report due Friday to determine how well the US economy is holding up amid a global slowdown.
Some investors are betting that Trump
will delay the additional duties as long as he gets close enough to a compromise because the tariff hike would hurt US consumers during the
crucial year-end shopping season.
However, Trump has repeatedly sent mixed messages about the status of negotiations, sparking fits of
optimism and despair in financial markets.
The yen traded at 108.81 per dollar, ceding some of the previous day's gains as positive signs
about the trade dispute hurt demand for safe-haven currencies.
The yield on benchmark 10-year Treasury notes fell slightly to 1.7723 per
cent in Asia, retracing some of the gains it made in the previous session.
US crude edged 0.03 per cent lower to $58.41 a barrel on Thursday
as a 3 per cent rally overnight showed signs of fading.
However, prices could be supported if the Organization of the Petroleum Exporting
Countries, and allies including Russia, approve deeper crude output cuts when they meet in Vienna on Thursday and Friday