Asia stocks jumped while the dollar was on a rollercoaster ride as U.S. President Donald Trump paused the tariffs on Mexico and Canada for a month. The deep sell-off and the reversal in markets within 24 hours reflect Trump's dealmaking underscores that everything was negotiable.

Stocks recoup losses after Trump delays tariffs

Asia's stock market fell as Treasury yields and the US dollar increased, suggesting that investors have not yet completely adjusted their expectations for interest rates. Japan, Australia, and China's equity indexes all saw declines, while the Kospi Index reached a six-month low due to a drop in South Korean stocks.

Asia stocks fall as treasury yields, dollar higher

Asian equities rose on Friday, boosted by Hong Kong and China stocks, while the dollar was set for its best week in more than a month as investors priced in the prospect of the Federal Reserve taking interest rates above 5% next year.

WION Business News | China leads Asia stocks higher

Asian shares slid sharply and the safe-haven dollar held a two-decade peak on Tuesday after Wall Street hit a confirmed bear market milestone on fears aggressive US interest rate hikes would push the world's largest economy into recession.

Asian stocks slide, Indian markets trade with losses

Days after US inflation touched a 40-year high, Asian stocks sank today morning. Bond yields have ticked higher. Red hot US inflation reignited worries about even more aggressive federal policy.

Asian stock sink as high US inflation trigger worries

Asian stocks swing to 3-week high on Monday while the dollar was pinned near five-week lows as investors wagered on an eventual slowdown in US monetary tightening.

Asia stocks hit 3-week top, dollar near 5 weeks low

After Reports of Ukraine Nuclear plant fire emerged, Asia stocks slid to a 16-month low. Euro also suffered heavy losses vs US Dollars.

Reports of Ukraine Nuclear plant fire: Asia stocks slide to a 16-month low

A sharp bounce in the price of oil Tuesday provided some support to under-pressure stocks in early Asian trade, a day after global equities suffered their biggest losses in more than a decade.

Also read: <a href="https://www.wionews.com/business-economy/mukesh-ambani-becomes-poorer-by-over-rs-41-700-crores-after-sensex-crash-285284" hreflang="en">Mukesh Ambani becomes poorer by over Rs 41, 700 crores after Sensex crash</a>

World stock markets had capitulated on what has become known as "Black Monday", with the Dow Jones Index in the US losing more than 2,000 points, and the crash even triggering the emergency break in early trade amid panic selling.

Also read: <a href="https://www.wionews.com/business-economy/oil-takes-biggest-daily-dive-in-over-a-decade-as-russia-opec-split-284881" hreflang="en">Oil takes biggest daily dive in over a decade as Russia, OPEC split</a>

But there was some relief on Tuesday as oil prices jumped around six per cent after plunging by a third the previous day, in their worst session since the 1991 Gulf War.

Japan's main Nikkei index opened three per cent lower following the dizzying falls on Wall Street but later pared back losses by more than half.

An hour and a half into trade, the Nikkei stood at 19,622.05 points, a loss of 0.4 per cent compared to the previous day.

The Nikkei was helped by a sell-off in the yen, which is normally heavily bought during times of market uncertainty. A weaker yen is positive for exporters on the Japanese market and usually boosts their share prices.

<div class="videoWrapper trancodeVideo"><iframe allowfullscreen="" autoplay="1" class="includeVideo" frameborder="0" height="350" src="http://13.235.153.162/videos/big-blow-to-oil-industry-due-to-covid-19-outbreak-opec-announces-massive-output-cuts-284813/embed" style="width:100%;max-width:560px;" width="560"></iframe></div>

The market in Seoul was down 0.4 per cent and the ASX in Australia pared losses to around one per cent after opening lower by nearly four per cent.

In China, where authorities reported the lowest number of fresh coronavirus cases since data started being reported in late January, the benchmark Shanghai Composite Index opened 0.61 per cent higher at 2,961.38 points.

The Shenzhen Composite Index, which tracks stocks on China's second exchange, opened 0.63 per cent higher, up 11.68 points, at 1,854.34.

Market panic had been driven by uncertainty over the spreading coronavirus but also a spat between Saudi Arabia and Russia over oil production that had battered prices.

Top exporter Saudi Arabia slashed the prices it charges customers following a bust-up with Russia over crude production cuts, starting a price war that sent traders into a tailspin.

Stephen Innes, the chief market strategist at AxiCorp, described Monday's market reaction as the "sum of all fears" and warned the panic had not stopped yet amid "growing evidence that an oil shock of historic proportions is now underway."

"Severe weakness in energy markets is quickly cascading into broader declines in commodity markets, high-yield credit, and equities," he said.

The panic on Monday was felt around the world, with the Dax blue-chip index in Frankfurt seeing its sharpest single fall since 2001.

London's FTSE index closed down more than seven per cent while in Paris, the CAC-40 index lost over eight per cent, its worst daily drop since the 2008 financial crisis.

"The markets have passed from panic mode into pure hysteria," said Ayush Ansal, chief investment officer at trading firm Crimson Black Capital.

"Markets were at breaking point before Saudi Arabia's decision to launch an oil price war but this latest development has taken them beyond that."

A sharp bounce in the price of oil Tuesday provided some support to under-pressure stocks in early Asian trade, a day after global equities suffered their biggest losses in more than a decade.

A sharp bounce in the price of oil Tuesday provided some support to under-pressure stocks in early Asian trade, a day after global equities suffered their biggest losses in more than a decade. Also read: Mukesh Ambani becomes poorer by over Rs 41, 700 crores after Sensex crash World stock markets had capitulated on what has become known as "Black Monday", with the Dow Jones Index in the US losing more than 2,000 points, and the crash even triggering the emergency break in early trade amid panic selling. Also read: Oil takes biggest daily dive in over a decade as Russia, OPEC split But there was some relief on Tuesday as oil prices jumped around six per cent after plunging by a third the previous day, in their worst session since the 1991 Gulf War. Japan's main Nikkei index opened three per cent lower following the dizzying falls on Wall Street but later pared back losses by more than half. An hour and a half into trade, the Nikkei stood at 19,622.05 points, a loss of 0.4 per cent compared to the previous day. The Nikkei was helped by a sell-off in the yen, which is normally heavily bought during times of market uncertainty. A weaker yen is positive for exporters on the Japanese market and usually boosts their share prices. The market in Seoul was down 0.4 per cent and the ASX in Australia pared losses to around one per cent after opening lower by nearly four per cent. In China, where authorities reported the lowest number of fresh coronavirus cases since data started being reported in late January, the benchmark Shanghai Composite Index opened 0.61 per cent higher at 2,961.38 points. The Shenzhen Composite Index, which tracks stocks on China's second exchange, opened 0.63 per cent higher, up 11.68 points, at 1,854.34. Market panic had been driven by uncertainty over the spreading coronavirus but also a spat between Saudi Arabia and Russia over oil production that had battered prices. Top exporter Saudi Arabia slashed the prices it charges customers following a bust-up with Russia over crude production cuts, starting a price war that sent traders into a tailspin. Stephen Innes, the chief market strategist at AxiCorp, described Monday's market reaction as the "sum of all fears" and warned the panic had not stopped yet amid "growing evidence that an oil shock of historic proportions is now underway." "Severe weakness in energy markets is quickly cascading into broader declines in commodity markets, high-yield credit, and equities," he said. The panic on Monday was felt around the world, with the Dax blue-chip index in Frankfurt seeing its sharpest single fall since 2001. London's FTSE index closed down more than seven per cent while in Paris, the CAC-40 index lost over eight per cent, its worst daily drop since the 2008 financial crisis. "The markets have passed from panic mode into pure hysteria," said Ayush Ansal, chief investment officer at trading firm Crimson Black Capital. "Markets were at breaking point before Saudi Arabia's decision to launch an oil price war but this latest development has taken them beyond that."

Asian Stock Market supported after sharp bounce in Oil prices

Asian shares edged lower and US&nbsp;stock futures darted in and out of losses on Tuesday, as the holiday lull offset optimism that a US China trade deal will boost exports and corporate earnings.

MSCI's broadest index of <a href="https://www.wionews.com/business-economy/asia-pacific-private-equity-india-and-china-lead-deals-but-fund-raising-slowing-203978">Asia-Pacific</a> shares outside Japan was down 0.14 per cent.

Blue-chip shares in China rose 0.37per cent&nbsp;after Premier <a href="https://www.wionews.com/business-economy/china-premier-li-keqiang-warns-us-against-trade-war-13404">Li Keqiang</a> said on Monday the government was considering more measures to lower corporate financing costs.

Australian shares rose 0.13 per cent, while South Korean shares fell 0.54 per cent. Japan's Nikkei nudged 0.04 per cent higher.

Sterling traded near a four-week low versus the euro and a three-week trough against the dollar on growing doubts over how Britain will navigate the transition period for its exit from the European Union.

Oil prices held steady before data on US&nbsp;crude inventories later on Tuesday, but there are signs that recent supply cuts may not last after Russia's energy minister said oil producers could ease output restrictions in March.

Wall Street's main indexes posted record closing highs on Monday after US&nbsp;President <a href="https://www.wionews.com/opinions/donald-trumps-attitude-towards-india-unpredictable-unreliable-238560">Donald Trump</a> said an initial US-China trade pact would be signed soon.

A de-escalation of a trade conflict between the world's two largest economies is a positive for companies that feed global supply chains, but some investors want to wait until next year to see how long the current thaw in Sino-US&nbsp;relations lasts.

"Risks to the outlook receded this year, which supported financial markets, but we cannot say the same thing about next year," said Hiroshi Miyazaki, senior economist at Mitsubishi UFJ Morgan Stanley Securities in Tokyo.

"No one can predict what will happen with US-China relations, and the US&nbsp;still has some tariffs on Chinese goods in place."

Trading is expected to be subdued as many financial markets will start closing from Tuesday for the Christmas holidays.

US&nbsp;stock futures rose 0.04 per cent after the S&amp;P 500 gained 0.09&nbsp;per cent and the Dow Jones Industrial Average rose 0.34&nbsp;per cent&nbsp;on Monday.

Shares of Boeing Co gave the Dow a boost after the planemaker ousted its chief executive officer over a prolonged crisis following two fatal crashes of its best-selling <a href="https://www.wionews.com/business-economy/financial-hit-from-737-max-will-not-slow-appetite-for-services-deals-boeing-ceo-dennis-muilenburg-246131">737 MAX jetliner</a>.

Equity investors got a rare double dose of positive news earlier this month when Washington and Beijing agreed a preliminary deal to avoid additional US&nbsp;tariffs on Chinese goods and a British general election gave the ruling Conservative Party a free hand to enact its Brexit agenda.

However, currency markets shows some investors remain circumspect, because new problems with trade friction and Brexit could easily emerge next year.

Against the euro, sterling was quoted at 85.66 pence, close to its lowest since November&nbsp;22. The pound traded at $1.2946, close to its lowest since December 2.

Sterling has given up all the gains it made immediately after the British general election on December&nbsp;12.

Spot gold rose 0.3&nbsp;per cent&nbsp;to $1,490.30 per ounce. Earlier in the day, prices hit their highest since November&nbsp;7, in another sign that some investors remain wary of risk.

In the onshore market, China's yuan reversed early losses to trade at 7.0115 per dollar.

China's government is considering broad-based and "targeted" cuts in banks' reserve requirement ratio to lower financing costs for small firms, the country's premier said on Monday, showing policymakers remain under pressure to counter an economic slowdown.

US&nbsp;crude ticked up 0.12 per cent&nbsp;to $60.61 a barrel, and Brent crude rose 0.24 per cent&nbsp;to $66.55 per barrel.

OPEC and other leading oil producers may consider easing oil output restrictions at their meeting in March, Russian Energy Minister Alexander Novak said in an interview aired on Monday.

Asian shares edged lower and US stock futures darted in and out of losses on Tuesday, as the holiday lull offset optimism that a US China trade deal will boost exports and corporate earnings.

Asian shares edged lower and US stock futures darted in and out of losses on Tuesday, as the holiday lull offset optimism that a US China trade deal will boost exports and corporate earnings. MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.14 per cent. Blue-chip shares in China rose 0.37per cent after Premier Li Keqiang said on Monday the government was considering more measures to lower corporate financing costs. Australian shares rose 0.13 per cent, while South Korean shares fell 0.54 per cent. Japan's Nikkei nudged 0.04 per cent higher. Sterling traded near a four-week low versus the euro and a three-week trough against the dollar on growing doubts over how Britain will navigate the transition period for its exit from the European Union. Oil prices held steady before data on US crude inventories later on Tuesday, but there are signs that recent supply cuts may not last after Russia's energy minister said oil producers could ease output restrictions in March. Wall Street's main indexes posted record closing highs on Monday after US President Donald Trump said an initial US-China trade pact would be signed soon. A de-escalation of a trade conflict between the world's two largest economies is a positive for companies that feed global supply chains, but some investors want to wait until next year to see how long the current thaw in Sino-US relations lasts. "Risks to the outlook receded this year, which supported financial markets, but we cannot say the same thing about next year," said Hiroshi Miyazaki, senior economist at Mitsubishi UFJ Morgan Stanley Securities in Tokyo. "No one can predict what will happen with US-China relations, and the US still has some tariffs on Chinese goods in place." Trading is expected to be subdued as many financial markets will start closing from Tuesday for the Christmas holidays. US stock futures rose 0.04 per cent after the S&P 500 gained 0.09 per cent and the Dow Jones Industrial Average rose 0.34 per cent on Monday. Shares of Boeing Co gave the Dow a boost after the planemaker ousted its chief executive officer over a prolonged crisis following two fatal crashes of its best-selling 737 MAX jetliner. Equity investors got a rare double dose of positive news earlier this month when Washington and Beijing agreed a preliminary deal to avoid additional US tariffs on Chinese goods and a British general election gave the ruling Conservative Party a free hand to enact its Brexit agenda. However, currency markets shows some investors remain circumspect, because new problems with trade friction and Brexit could easily emerge next year. Against the euro, sterling was quoted at 85.66 pence, close to its lowest since November 22. The pound traded at $1.2946, close to its lowest since December 2. Sterling has given up all the gains it made immediately after the British general election on December 12. Spot gold rose 0.3 per cent to $1,490.30 per ounce. Earlier in the day, prices hit their highest since November 7, in another sign that some investors remain wary of risk. In the onshore market, China's yuan reversed early losses to trade at 7.0115 per dollar. China's government is considering broad-based and "targeted" cuts in banks' reserve requirement ratio to lower financing costs for small firms, the country's premier said on Monday, showing policymakers remain under pressure to counter an economic slowdown. US crude ticked up 0.12 per cent to $60.61 a barrel, and Brent crude rose 0.24 per cent to $66.55 per barrel. OPEC and other leading oil producers may consider easing oil output restrictions at their meeting in March, Russian Energy Minister Alexander Novak said in an interview aired on Monday.

Asia stocks ease slightly as doubts about risk factors linger

Global stocks dropped on Tuesday, hurt by US-China trade frictions while the British pound fell to its lowest since January 2017 amid political uncertainty as Prime Minister Boris Johnson tried to stymie lawmakers' efforts to stop a no-deal Brexit.

MSCI's broadest index of Asia-Pacific shares outside Japan shed 0.7 per cent. India, closed on Monday, led losses, with the benchmark dropping 1 per cent following worse-than-expected economic growth data on Friday.

China's mainland shares were fractionally lower while Japan's Nikkei inched up 0.1 per cent.

European shares are expected to dip, with pan-European Euro Stoxx 50 futures down 0.09 per cent.

In an escalation of their trade war, the United States on Sunday began imposing 15 per cent&nbsp;tariffs on a variety of Chinese goods, and China began imposing new duties on US crude oil.

Although US President Donald Trump has said both sides would still meet for talks later this month, tensions show little sign of abating.

China said on Monday it lodged a complaint against the United States at the World Trade Organisation over US import duties, trashing the latest tariff actions as violating the consensus reached by leaders of China and the United States in a meeting in Osaka.

"We have so many problems around the world, starting from the US-China trade war and Brexit. But investors appear to be getting used to be exposed to them," said Hiroyuki Ueno, senior strategist at Sumitomo Mitsui Trust Asset Management

"No one really thinks Washington and Beijing will solve the issues. But as long as the US economy keeps going, stock prices will have limited downside," he said.

US manufacturing survey by the Institute for Supply Management (ISM) due at 1400 GMT Tuesday is a major focus for investors.

Although US manufacturing activity has been slowing in recent months, the ISM's index has so far stayed above 50, pointing to growth in the sector.

US bond yields rose a tad on profit-taking after a market holiday in the United States on Monday.

The 10-year US Treasuries yield rose 2.5 basis points to 1.532 per cent, off a three-year low of 1.443 per cent touched last week. The yield dropped 51.5 basis points last month, the biggest monthly drop since August 2011.

In the currency market, sterling dropped as much as 0.58 per cent to $1.1993, its lowest level since January 2017, extending Monday's 0.85 per cent fall.

Prime Minister Johnson implicitly warned lawmakers on Monday that he would seek an election on Oct 14 if they tied his hands on Brexit, ruling out ever countenancing a further delay to Britain's departure from the European Union.

On Tuesday, lawmakers will decide whether to move Britain one step closer to a snap election when they vote on the first stage of their plan to block Johnson from pursuing a no-deal Brexit.

"Depending on further developments in UK politics, the pound could see sharp moves in the coming week or two. We think it could fall to as low as $1.13 this month," said Sumino Kamei, senior currency strategist at MUFG Bank.

Uncertainties over Brexit have already hit the UK economy, with a survey by the IHS Markit/CIPS showing British manufacturing contracted last month at the fastest rate in seven years.

The picture is not much better in Europe, and the European Central Bank is widely expected to cut interest rates further into negative levels next week to cushion the blow, pressuring the euro.

The common currency fell 0.25 per cent to a two-year low of $1.0939. The two-year German government bond yield has dipped to minus 0.919 per cent on Monday, near its record low around minus 0.964&nbsp; per cent&nbsp;hit in early 2017.

The offshore Chinese yuan dropped to a record low of 7.1975 per dollar on Tuesday morning while the Australian dollar

traded down 0.15 per cent at $0.6705, cutting some losses after the Reserve Bank of Australia kept interest rates on hold.

Still, the Aussie stayed within a stone's throw from a decade-low of $0.66775 hit last month.

Argentine bond prices fell to record lows on Monday and the official and black-market pesos diverged after the country imposed capital controls in a bid to stem a currency rout that is sharpening the risk of default.

The peso closed 0.88 per cent stronger in official markets but closed 0.79 per cent weaker in the black market at 63.5 per dollar.

Oil prices were also dented by concerns over the trade war. US West Texas Intermediate (WTI) crude lost 0.47 per cent to $54.84 per barrel. International benchmark Brent futures dipped 0.05 per cent to $58.63 per barrel.

Global stocks dropped on Tuesday, hurt by US-China trade frictions while the British pound fell to its lowest since January 2017 amid political uncertainty as Prime Minister Boris Johnson tried to stymie lawmakers' efforts to stop a no-deal Brexit.

Global stocks dropped on Tuesday, hurt by US-China trade frictions while the British pound fell to its lowest since January 2017 amid political uncertainty as Prime Minister Boris Johnson tried to stymie lawmakers' efforts to stop a no-deal Brexit. MSCI's broadest index of Asia-Pacific shares outside Japan shed 0.7 per cent. India, closed on Monday, led losses, with the benchmark dropping 1 per cent following worse-than-expected economic growth data on Friday. China's mainland shares were fractionally lower while Japan's Nikkei inched up 0.1 per cent. European shares are expected to dip, with pan-European Euro Stoxx 50 futures down 0.09 per cent. In an escalation of their trade war, the United States on Sunday began imposing 15 per cent tariffs on a variety of Chinese goods, and China began imposing new duties on US crude oil. Although US President Donald Trump has said both sides would still meet for talks later this month, tensions show little sign of abating. China said on Monday it lodged a complaint against the United States at the World Trade Organisation over US import duties, trashing the latest tariff actions as violating the consensus reached by leaders of China and the United States in a meeting in Osaka. "We have so many problems around the world, starting from the US-China trade war and Brexit. But investors appear to be getting used to be exposed to them," said Hiroyuki Ueno, senior strategist at Sumitomo Mitsui Trust Asset Management "No one really thinks Washington and Beijing will solve the issues. But as long as the US economy keeps going, stock prices will have limited downside," he said. US manufacturing survey by the Institute for Supply Management (ISM) due at 1400 GMT Tuesday is a major focus for investors. Although US manufacturing activity has been slowing in recent months, the ISM's index has so far stayed above 50, pointing to growth in the sector. US bond yields rose a tad on profit-taking after a market holiday in the United States on Monday. The 10-year US Treasuries yield rose 2.5 basis points to 1.532 per cent, off a three-year low of 1.443 per cent touched last week. The yield dropped 51.5 basis points last month, the biggest monthly drop since August 2011. In the currency market, sterling dropped as much as 0.58 per cent to $1.1993, its lowest level since January 2017, extending Monday's 0.85 per cent fall. Prime Minister Johnson implicitly warned lawmakers on Monday that he would seek an election on Oct 14 if they tied his hands on Brexit, ruling out ever countenancing a further delay to Britain's departure from the European Union. On Tuesday, lawmakers will decide whether to move Britain one step closer to a snap election when they vote on the first stage of their plan to block Johnson from pursuing a no-deal Brexit. "Depending on further developments in UK politics, the pound could see sharp moves in the coming week or two. We think it could fall to as low as $1.13 this month," said Sumino Kamei, senior currency strategist at MUFG Bank. Uncertainties over Brexit have already hit the UK economy, with a survey by the IHS Markit/CIPS showing British manufacturing contracted last month at the fastest rate in seven years. The picture is not much better in Europe, and the European Central Bank is widely expected to cut interest rates further into negative levels next week to cushion the blow, pressuring the euro. The common currency fell 0.25 per cent to a two-year low of $1.0939. The two-year German government bond yield has dipped to minus 0.919 per cent on Monday, near its record low around minus 0.964 per cent hit in early 2017. The offshore Chinese yuan dropped to a record low of 7.1975 per dollar on Tuesday morning while the Australian dollar traded down 0.15 per cent at $0.6705, cutting some losses after the Reserve Bank of Australia kept interest rates on hold. Still, the Aussie stayed within a stone's throw from a decade-low of $0.66775 hit last month. Argentine bond prices fell to record lows on Monday and the official and black-market pesos diverged after the country imposed capital controls in a bid to stem a currency rout that is sharpening the risk of default. The peso closed 0.88 per cent stronger in official markets but closed 0.79 per cent weaker in the black market at 63.5 per dollar. Oil prices were also dented by concerns over the trade war. US West Texas Intermediate (WTI) crude lost 0.47 per cent to $54.84 per barrel. International benchmark Brent futures dipped 0.05 per cent to $58.63 per barrel.

Asia stocks dented by trade war, Brexit showdown paralyses pound

Asian stocks rose in step with their global peers while safe-haven bonds retreated on Tuesday, as signs Sino-US trade hostilities might be easing for now helped restore investor confidence after the previous session's rout.

Supporting the market mood, US President Donald Trump on Monday flagged the possibility of a trade deal with China and said he believed Beijing was sincere in its desire to reach an agreement. Global markets had been roiled at the start of the week by new tariffs from the world's two largest economies.

MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.3% after dropping 1.3% the previous day.

The Shanghai Composite Index advanced 1%.

South Korea's KOSPI added 0.8% and Japan's Nikkei rose 1.1%.

Equity markets may have found traction for now but the longer-term outlook for risk assets, buffeted repeatedly by trade concerns, remained shaky.

"There is still a large element of uncertainty regarding the US-China trade dispute. It remains difficult to foresee a resolution, and this will continue to weigh on equity market sentiment," said Shusuke Yamada, chief Japan FX and equity strategist at Bank Of America Merrill Lynch.

"Apart from the trade war, the equity markets also have to keep an eye on Brexit proceedings, monetary policy of key players such as the European Central Bank and moves in the Chinese yuan."

China's onshore yuan nudged down to a fresh 11-year low of 7.1566 per dollar.

China has allowed the tightly-managed yuan to slide some 3.6% so far this month as trade tensions with the United States worsened. This has triggered fears of a global currency war, in which countries try to weaken their currencies in an attempt to soften the blows of a broader economic slowdown. "It is clear that the trade conflict between the United States and China is getting ever more serious. The two may still opt to negotiate, but prospects for a quick resolution have diminished greatly as neither side can back down," said Yoshimasa Maruyama, chief market economist at SMBC Nikko Securities.

"The trade conflict only increases the torment on the global economy."

The dollar held gains made the previous day helped by a rebound in US Treasury yields.

The dollar index versus a basket of six major currencies stood at 97.990, having risen about 0.5% overnight.

The benchmark 10-year US Treasury yield was at 1.523%, pulled back from a three-year low of 1.443% reached on Monday on the back of wide-spread risk aversion.

The Japanese 10-year government bond yield was up 2.5 basis points at minus 0.255% after plumbing minus 0.285% on Monday, its lowest since July 2016.

The greenback traded at 105.770 yen following a 0.7% gain on Monday, when it had brushed an eight-month low of 104.460. The euro was effectively flat at $1.1104 after losing 0.4% on Monday.

The Australian dollar, sensitive to developments in China, Australia's largest trading partner, was steady at $0.6773 following a gain of 0.3% the previous day.

Crude oil prices recovered some ground as the broader markets stabilised, trimming some of their significant losses the previous day on the prospect of crude from Iran, currently facing sanctions, hitting the market.

Brent crude futures were up 0.46% at $58.97 per barrel after losing 1% the previous day. US crude rose 0.6% to $53.96 per barrel.

Oil prices fell on Monday after French President Emmanuel Macron said preparations were underway for a meeting between Iranian President Hassan Rouhani and President Trump in the coming weeks to find a solution to a nuclear standoff.

Asian stocks rose in step with their global peers while safe-haven bonds retreated on Tuesday, as signs Sino-US trade hostilities might be easing for now helped restore investor confidence after the previous session's rout.

Asian stocks rose in step with their global peers while safe-haven bonds retreated on Tuesday, as signs Sino-US trade hostilities might be easing for now helped restore investor confidence after the previous session's rout. Supporting the market mood, US President Donald Trump on Monday flagged the possibility of a trade deal with China and said he believed Beijing was sincere in its desire to reach an agreement. Global markets had been roiled at the start of the week by new tariffs from the world's two largest economies. MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.3% after dropping 1.3% the previous day. The Shanghai Composite Index advanced 1%. South Korea's KOSPI added 0.8% and Japan's Nikkei rose 1.1%. Equity markets may have found traction for now but the longer-term outlook for risk assets, buffeted repeatedly by trade concerns, remained shaky. "There is still a large element of uncertainty regarding the US-China trade dispute. It remains difficult to foresee a resolution, and this will continue to weigh on equity market sentiment," said Shusuke Yamada, chief Japan FX and equity strategist at Bank Of America Merrill Lynch. "Apart from the trade war, the equity markets also have to keep an eye on Brexit proceedings, monetary policy of key players such as the European Central Bank and moves in the Chinese yuan." China's onshore yuan nudged down to a fresh 11-year low of 7.1566 per dollar. China has allowed the tightly-managed yuan to slide some 3.6% so far this month as trade tensions with the United States worsened. This has triggered fears of a global currency war, in which countries try to weaken their currencies in an attempt to soften the blows of a broader economic slowdown. "It is clear that the trade conflict between the United States and China is getting ever more serious. The two may still opt to negotiate, but prospects for a quick resolution have diminished greatly as neither side can back down," said Yoshimasa Maruyama, chief market economist at SMBC Nikko Securities. "The trade conflict only increases the torment on the global economy." The dollar held gains made the previous day helped by a rebound in US Treasury yields. The dollar index versus a basket of six major currencies stood at 97.990, having risen about 0.5% overnight. The benchmark 10-year US Treasury yield was at 1.523%, pulled back from a three-year low of 1.443% reached on Monday on the back of wide-spread risk aversion. The Japanese 10-year government bond yield was up 2.5 basis points at minus 0.255% after plumbing minus 0.285% on Monday, its lowest since July 2016. The greenback traded at 105.770 yen following a 0.7% gain on Monday, when it had brushed an eight-month low of 104.460. The euro was effectively flat at $1.1104 after losing 0.4% on Monday. The Australian dollar, sensitive to developments in China, Australia's largest trading partner, was steady at $0.6773 following a gain of 0.3% the previous day. Crude oil prices recovered some ground as the broader markets stabilised, trimming some of their significant losses the previous day on the prospect of crude from Iran, currently facing sanctions, hitting the market. Brent crude futures were up 0.46% at $58.97 per barrel after losing 1% the previous day. US crude rose 0.6% to $53.96 per barrel. Oil prices fell on Monday after French President Emmanuel Macron said preparations were underway for a meeting between Iranian President Hassan Rouhani and President Trump in the coming weeks to find a solution to a nuclear standoff.

Asia stocks, bond yields climb as trade war fears ebb

Investor caution ahead of the Federal Reserve's interest rate meeting capped Asian stocks on Tuesday, while crude oil prices retreated as global growth worries overshadowed supply concerns stemming from recent Middle East tensions.

MSCI's broadest index of Asia-Pacific shares outside Japan inched up 0.05%.

Australian stocks added 0.1% while Japan's Nikkei dipped 0.05%.

The Fed, facing fresh demands by US President Donald Trump to cut interest rates, begins a two-day meeting later on Tuesday. The central bank is expected to leave borrowing costs unchanged this time but possibly lay the groundwork for a rate cut later this year.

Fresh hopes for looser US monetary policy have been a tonic for risk assets markets, which were buffeted last month by an escalation in the trade conflict between Washington and Beijing. The S&amp;P 500 has gained 5% this month after sliding in May on trade war fears.

Focus is now on how close the Fed could be to cutting interest rates amid the raging US-China trade war, signs of the economy losing steam and pressure by President Trump to ease policy.

"The FOMC (Federal Open Market Committee) meeting is the week's biggest event so there will be a degree of caution prevailing in the markets," said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui DS Asset Management.

"Expectations for a rate cut in July have increased significantly, so the markets could experience disappointment if the Fed does not send strong signals of impending easing."

US Treasury yields dipped on Monday after the New York Fed's "Empire" gauge of business growth in the state showed a fall this month to its weakest in more than 2-1/2-years, fanning rate cut expectations.

The dollar index against a basket of six major currencies stood little changed at 97.507 after pulling back from a two-week high on the decline in Treasury yields.

The pound traded at $1.2542 after retreating overnight to a six-month low of $1.2532 on Monday on concerns that arch-Brexiteer Boris Johnson will replace Theresa May as prime minister.

The euro was a shade higher at $1.1224 after spending the previous day confined to a narrow range.

US crude oil futures shed 0.08% to $51.89 per barrel after retreating 1.1% the previous day.

Oil prices had slipped on Monday as weak Chinese economic data released at the end of last week led to fears of lower global demand for the commodity.

Concerns over weakening demand overshadowed tensions in the Middle East, which remained high following last week's attacks on two oil tankers in the Gulf of Oman.

Investor caution ahead of the Federal Reserve's interest rate meeting capped Asian stocks on Tuesday, while crude oil prices retreated as global growth worries overshadowed supply concerns stemming from recent Middle East tensions.

Investor caution ahead of the Federal Reserve's interest rate meeting capped Asian stocks on Tuesday, while crude oil prices retreated as global growth worries overshadowed supply concerns stemming from recent Middle East tensions. MSCI's broadest index of Asia-Pacific shares outside Japan inched up 0.05%. Australian stocks added 0.1% while Japan's Nikkei dipped 0.05%. The Fed, facing fresh demands by US President Donald Trump to cut interest rates, begins a two-day meeting later on Tuesday. The central bank is expected to leave borrowing costs unchanged this time but possibly lay the groundwork for a rate cut later this year. Fresh hopes for looser US monetary policy have been a tonic for risk assets markets, which were buffeted last month by an escalation in the trade conflict between Washington and Beijing. The S&P 500 has gained 5% this month after sliding in May on trade war fears. Focus is now on how close the Fed could be to cutting interest rates amid the raging US-China trade war, signs of the economy losing steam and pressure by President Trump to ease policy. "The FOMC (Federal Open Market Committee) meeting is the week's biggest event so there will be a degree of caution prevailing in the markets," said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui DS Asset Management. "Expectations for a rate cut in July have increased significantly, so the markets could experience disappointment if the Fed does not send strong signals of impending easing." US Treasury yields dipped on Monday after the New York Fed's "Empire" gauge of business growth in the state showed a fall this month to its weakest in more than 2-1/2-years, fanning rate cut expectations. The dollar index against a basket of six major currencies stood little changed at 97.507 after pulling back from a two-week high on the decline in Treasury yields. The pound traded at $1.2542 after retreating overnight to a six-month low of $1.2532 on Monday on concerns that arch-Brexiteer Boris Johnson will replace Theresa May as prime minister. The euro was a shade higher at $1.1224 after spending the previous day confined to a narrow range. US crude oil futures shed 0.08% to $51.89 per barrel after retreating 1.1% the previous day. Oil prices had slipped on Monday as weak Chinese economic data released at the end of last week led to fears of lower global demand for the commodity. Concerns over weakening demand overshadowed tensions in the Middle East, which remained high following last week's attacks on two oil tankers in the Gulf of Oman.

Asia stocks capped ahead of Fed, oil on defensive

Asian stocks were on shaky ground on Wednesday, as earlier relief over Washington's temporary relaxation of curbs against China's Huawei Technologies failed to offset deeper worries about trade frictions between the world's two largest economies.

The Chinese markets, which have endured a volatile few months, started off on a cautious note. The Shanghai Composite Index was last down 0.1%.

Australian stocks gave up 0.1% and South Korea's KOSPI fell 0.2%. Japan's Nikkei edged up 0.3%.

MSCI's broadest index of Asia-Pacific shares outside Japan moved in and out of the red and last stood little changed.

"Some in the markets will continue to cling on to hopes of the United States and China reaching an agreement at the upcoming G20 meeting," said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui DS Asset Management.

"But the ongoing trade conflict looks to be a protracted one, and its potentially negative impact on various economies is becoming a running concern."

Leaders from G20 nations are scheduled to gather for a summit in Japan at the end of June.

The US Commerce Department on Monday granted Huawei Technologies Co Ltd a license to buy US goods until August 19, a move intended to give telecom operators that rely on Huawei time to make other arrangements.

The United States blocked Huawei from buying US goods last week in a major escalation in the trade war against China, saying the firm was involved in activities contrary to national security.

Shares of technology companies helped lift Wall Street on Tuesday after Washington's easing of curbs on Huawei. Chipmakers, many of which sell to Huawei, had been hit at the start of the week.

"Notwithstanding the latest tweet from President Trump that some restrictions on Huawei had been eased, global equity markets have continued to underestimate the relentless expansion of the US-China trade dispute," wrote Sean Darby, chief global equity strategist at Jefferies.

"The progression from tariffs, to direct actions against single Chinese companies and their inter-linked supply chains, has a wide-ranging impact on profitability for corporates in both economies that investors will find difficult to quantify."

The dollar traded at 110.570 yen after popping up to a two-week high of 110.675 against the safe-haven Japanese currency overnight as US yields rose in the wake of gains by Wall Street shares.

The euro was little changed at $1.1165 after brushing a 2-1/2-week trough of $1.1142.

The pound was steady at $1.2710. Sterling had sunk to a four-month low of $1.2685 on Tuesday on Brexit worries but bounced back after British Prime Minister Theresa May proposed a "new" Brexit deal.

The Australian dollar, sensitive to shifts in risk sentiment, inched down 0.05% to $0.6882. The currency had suffered losses the previous day when Australia's central bank governor said interest rates might be cut as soon as next month.

In commodities, US West Texas Intermediate (WTI) crude futures were down 0.89% at $62.57 per barrel after American Petroleum Institute data showed that US crude stockpiles rose unexpectedly last week.

Oil was also pressured by Saudi Arabia reiterating that it would aim to keep the market balanced and try to reduce tensions in the Middle East.

Brent crude futures lost 0.47% to $71.84 per barrel.

Asian stocks were on shaky ground on Wednesday, as earlier relief over Washington's temporary relaxation of curbs against China's Huawei Technologies failed to offset deeper worries about trade frictions between the world's two largest economies.

Asian stocks were on shaky ground on Wednesday, as earlier relief over Washington's temporary relaxation of curbs against China's Huawei Technologies failed to offset deeper worries about trade frictions between the world's two largest economies. The Chinese markets, which have endured a volatile few months, started off on a cautious note. The Shanghai Composite Index was last down 0.1%. Australian stocks gave up 0.1% and South Korea's KOSPI fell 0.2%. Japan's Nikkei edged up 0.3%. MSCI's broadest index of Asia-Pacific shares outside Japan moved in and out of the red and last stood little changed. "Some in the markets will continue to cling on to hopes of the United States and China reaching an agreement at the upcoming G20 meeting," said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui DS Asset Management. "But the ongoing trade conflict looks to be a protracted one, and its potentially negative impact on various economies is becoming a running concern." Leaders from G20 nations are scheduled to gather for a summit in Japan at the end of June. The US Commerce Department on Monday granted Huawei Technologies Co Ltd a license to buy US goods until August 19, a move intended to give telecom operators that rely on Huawei time to make other arrangements. The United States blocked Huawei from buying US goods last week in a major escalation in the trade war against China, saying the firm was involved in activities contrary to national security. Shares of technology companies helped lift Wall Street on Tuesday after Washington's easing of curbs on Huawei. Chipmakers, many of which sell to Huawei, had been hit at the start of the week. "Notwithstanding the latest tweet from President Trump that some restrictions on Huawei had been eased, global equity markets have continued to underestimate the relentless expansion of the US-China trade dispute," wrote Sean Darby, chief global equity strategist at Jefferies. "The progression from tariffs, to direct actions against single Chinese companies and their inter-linked supply chains, has a wide-ranging impact on profitability for corporates in both economies that investors will find difficult to quantify." The dollar traded at 110.570 yen after popping up to a two-week high of 110.675 against the safe-haven Japanese currency overnight as US yields rose in the wake of gains by Wall Street shares. The euro was little changed at $1.1165 after brushing a 2-1/2-week trough of $1.1142. The pound was steady at $1.2710. Sterling had sunk to a four-month low of $1.2685 on Tuesday on Brexit worries but bounced back after British Prime Minister Theresa May proposed a "new" Brexit deal. The Australian dollar, sensitive to shifts in risk sentiment, inched down 0.05% to $0.6882. The currency had suffered losses the previous day when Australia's central bank governor said interest rates might be cut as soon as next month. In commodities, US West Texas Intermediate (WTI) crude futures were down 0.89% at $62.57 per barrel after American Petroleum Institute data showed that US crude stockpiles rose unexpectedly last week. Oil was also pressured by Saudi Arabia reiterating that it would aim to keep the market balanced and try to reduce tensions in the Middle East. Brent crude futures lost 0.47% to $71.84 per barrel.

Asia stocks fragile as trade anxiety overshadows Huawei reprieve

Asian stocks struggled near a 3-1/2-month low on Wednesday on lingering concerns over the economic impact of a US-China trade war, although an overnight bounce on Wall Street helped limit the losses.

MSCI's broadest index of Asia-Pacific shares outside Japan edged down 0.05%.

The index had fallen to its lowest level since the end of January the previous day as a trade conflict between the United States and China intensified. Beijing on Monday imposed a tariff hike on US&nbsp;goods following Washington's decision last week to hike its levies on Chinese imports.

Australian stocks added 0.07%, South Korea's KOSPI slipped 0.1% and Japan's Nikkei shed 0.4%.

US&nbsp;stocks on Tuesday reclaimed some of the ground lost in the prior day's steep sell-off, with tariff-sensitive technology stocks heartened by a slight softening in US-China trade rhetoric.

US&nbsp;President Donald Trump on Tuesday said he had a "very good" dialogue with China and insisted talks between the world's two largest economies had not collapsed.

Yet, investors braced for a protracted US-China trade war.

"In the short term the equity markets have begun digesting the latest round of the trade war, said Soichiro Monji, senior strategist at Sumitomo Mitsui DS Asset Management, adding that a bit of calm is returning to some markets as a result.

"Still, the US-China row looks to continue in the coming months. China did not seem to present a totally unified front in the latest round of the trade spat and its reaction bears watching going forward."

On the day, investors will look to a batch of Chinese economic data due later for a further gauge of the health of the world's second-biggest economy.

The Chinese yuan stood little changed at 6.9051 per dollar in offshore trade, having edged away from a five-month trough of 6.9200 set on Tuesday.

The dollar traded a shade higher at 109.675 yen, pulling away from a three-month low of 109.020 plumbed on Monday when trade war worries boosted investor demand for the safe-haven Japanese currency.

The euro was steady at $1.1202. The common currency had dipped nearly 0.2% the previous day after Italy's deputy prime minister said the country is ready to break European Union budget rules on debt levels if necessary to spur employment.

The dollar index against a basket of six major currencies was nearly flat at 97.534 after gaining 0.2% the previous day.

In commodities, US crude futures were down 1.04% at $61.14 per barrel after the American Petroleum Institute (API) reported a bigger-than-expected build in crude oil inventory.

US crude inventories rose by 8.6 million barrels in the week to May 10 to 477.8 million, compared with analysts' expectations for a decrease of 800,000 barrels.

Brent crude lost 0.69% to $70.75 per barrel.

Brent and US&nbsp;crude futures had surged the previous day after top exporter Saudi Arabia said explosive-laden drones launched by a Yemeni-armed movement aligned to Iran had attacked facilities belonging to state oil company Aramco.

Asian stocks struggled near a 3-1/2-month low on Wednesday on lingering concerns over the economic impact of a US-China trade war, although an overnight bounce on Wall Street helped limit the losses.

Asian stocks struggled near a 3-1/2-month low on Wednesday on lingering concerns over the economic impact of a US-China trade war, although an overnight bounce on Wall Street helped limit the losses. MSCI's broadest index of Asia-Pacific shares outside Japan edged down 0.05%. The index had fallen to its lowest level since the end of January the previous day as a trade conflict between the United States and China intensified. Beijing on Monday imposed a tariff hike on US goods following Washington's decision last week to hike its levies on Chinese imports. Australian stocks added 0.07%, South Korea's KOSPI slipped 0.1% and Japan's Nikkei shed 0.4%. US stocks on Tuesday reclaimed some of the ground lost in the prior day's steep sell-off, with tariff-sensitive technology stocks heartened by a slight softening in US-China trade rhetoric. US President Donald Trump on Tuesday said he had a "very good" dialogue with China and insisted talks between the world's two largest economies had not collapsed. Yet, investors braced for a protracted US-China trade war. "In the short term the equity markets have begun digesting the latest round of the trade war, said Soichiro Monji, senior strategist at Sumitomo Mitsui DS Asset Management, adding that a bit of calm is returning to some markets as a result. "Still, the US-China row looks to continue in the coming months. China did not seem to present a totally unified front in the latest round of the trade spat and its reaction bears watching going forward." On the day, investors will look to a batch of Chinese economic data due later for a further gauge of the health of the world's second-biggest economy. The Chinese yuan stood little changed at 6.9051 per dollar in offshore trade, having edged away from a five-month trough of 6.9200 set on Tuesday. The dollar traded a shade higher at 109.675 yen, pulling away from a three-month low of 109.020 plumbed on Monday when trade war worries boosted investor demand for the safe-haven Japanese currency. The euro was steady at $1.1202. The common currency had dipped nearly 0.2% the previous day after Italy's deputy prime minister said the country is ready to break European Union budget rules on debt levels if necessary to spur employment. The dollar index against a basket of six major currencies was nearly flat at 97.534 after gaining 0.2% the previous day. In commodities, US crude futures were down 1.04% at $61.14 per barrel after the American Petroleum Institute (API) reported a bigger-than-expected build in crude oil inventory. US crude inventories rose by 8.6 million barrels in the week to May 10 to 477.8 million, compared with analysts' expectations for a decrease of 800,000 barrels. Brent crude lost 0.69% to $70.75 per barrel. Brent and US crude futures had surged the previous day after top exporter Saudi Arabia said explosive-laden drones launched by a Yemeni-armed movement aligned to Iran had attacked facilities belonging to state oil company Aramco.

Asia stocks wobble near three-and-a-half-month low as trade worries linger

Asian stocks inched up to five-week highs on Friday, after Chairman Jerome Powell reiterated the Federal Reserve will be patient about raising interest rates and news that trade talks between Washington and Beijing are moving to higher levels.

As the Fed's dovish stance kept a lid on the dollar, China's yuan rose to its highest levels in more than five months and was on course for its biggest weekly gains since the 2005 revaluation in onshore trade.

MSCI's broadest index of Asia-Pacific shares outside Japan gained 0.2 per cent to the highest levels since December 6, while Japan's benchmark Nikkei advanced 0.7 per cent. Shanghai Composite Index initially rose 0.8 per cent, but that was pared to just 0.1 per cent.

Wall Street extended its rally into a fifth straight day on Thursday in a whipsaw trading session as investors responded to mixed comments by Powell, while a warning from Macy's pummelled retail stocks.&nbsp;

At the Economic Club of Washington, Powell reiterated the views of other policymakers that the Fed would be patient about interest rate hikes.

Major US stock indexes also quickly recovered from brief losses after Powell said that the Fed's balance sheet would be "substantially smaller".

"The word 'patient' is used often when the Fed's policy direction is still tightening but its next rate hike can wait for a considerable time. So risk assets now enjoy support from what we can call Powell put," said Tomoaki Shishido, economist at Nomura Securities.

"Similarly, Trump also softened his stance on China after sharp falls in stock prices. He has offered an olive branch to China and there's no reason China would not want to accept it," he said.

US and Chinese officials are working on arrangements for higher-level trade talks after mid-level officials this week discussed US demands that would require structural change in China to address issues such as IP theft, forced technology transfers and other non-tariff barriers.

US Treasury Secretary Steven Mnuchin said late on Thursday that Chinese Vice Premier Liu He will "most likely" visit Washington later in January for trade talks.

"For markets the upshot is that the outlook for 2019 is looking better as tensions de-escalate, creating the potential for a re-rating of risk assets as the tail risk of a near-term trade war is partially priced out," said Jeremy Lawson, chief economist at Aberdeen Standard Investments in Edinburgh.

"This is especially the case in Asia," he added.

Still, fundamental tensions between the US and China "are unlikely to go away and there is a high likelihood that any agreement to suspend tariffs eventually breaks down when it becomes clear that Trump’s objectives cannot really be met."

Some investors are also increasingly wary of lingering disputes in Washington over a wall Trump wants on the U.S.-Mexico border, which has led to a weeks-long partial government shutdown.

Flanked by border agents who are going without paychecks during the shutdown, Trump again threatened on Thursday to declare a national emergency to bypass Congress to fund a wall.

In the foreign exchange markets, the dollar was broadly soft after a small rebound from three-month lows the previous day.

The dollar index, measuring it against major peers, dipped 0.1 per cent to 95.38.

The euro firmed 0.2 per cent to $1.1523, while the dollar dipped 0.1 per cent to 108.28 yen.

The yuan, both onshore and offshore, climbed to the highest levels since late July, aided by a weaker dollar and rising hopes of progress in the US-China talks.

In onshore trade, the Chinese currency has risen 1.6 per cent this week, the biggest gain since July 2005 when Beijing abandoned the yuan's peg to the dollar.

US Treasury debt prices erased early gains after a soft 30-year bond auction and in reaction to Powell's comments on the Fed "substantially" reducing the size of its balance sheet.

The 10-year US Treasuries yield last stood at 2.728 per cent.

Crude prices held near one-month highs, but a more than week-long in oil rally slowed as optimism surrounding US-China trade talks faded a little.

In Asian trade, West Texas Intermediate crude futures slipped 0.6 per cent to $52.30 per barrel.

Asian stocks inched up to five-week highs on Friday, after Chairman Jerome Powell reiterated the Federal Reserve will be patient about raising interest rates and news that trade talks between Washington and Beijing are moving to higher levels.

Asian stocks inched up to five-week highs on Friday, after Chairman Jerome Powell reiterated the Federal Reserve will be patient about raising interest rates and news that trade talks between Washington and Beijing are moving to higher levels. As the Fed's dovish stance kept a lid on the dollar, China's yuan rose to its highest levels in more than five months and was on course for its biggest weekly gains since the 2005 revaluation in onshore trade. MSCI's broadest index of Asia-Pacific shares outside Japan gained 0.2 per cent to the highest levels since December 6, while Japan's benchmark Nikkei advanced 0.7 per cent. Shanghai Composite Index initially rose 0.8 per cent, but that was pared to just 0.1 per cent. Wall Street extended its rally into a fifth straight day on Thursday in a whipsaw trading session as investors responded to mixed comments by Powell, while a warning from Macy's pummelled retail stocks. At the Economic Club of Washington, Powell reiterated the views of other policymakers that the Fed would be patient about interest rate hikes. Major US stock indexes also quickly recovered from brief losses after Powell said that the Fed's balance sheet would be "substantially smaller". "The word 'patient' is used often when the Fed's policy direction is still tightening but its next rate hike can wait for a considerable time. So risk assets now enjoy support from what we can call Powell put," said Tomoaki Shishido, economist at Nomura Securities. "Similarly, Trump also softened his stance on China after sharp falls in stock prices. He has offered an olive branch to China and there's no reason China would not want to accept it," he said. US and Chinese officials are working on arrangements for higher-level trade talks after mid-level officials this week discussed US demands that would require structural change in China to address issues such as IP theft, forced technology transfers and other non-tariff barriers. US Treasury Secretary Steven Mnuchin said late on Thursday that Chinese Vice Premier Liu He will "most likely" visit Washington later in January for trade talks. "For markets the upshot is that the outlook for 2019 is looking better as tensions de-escalate, creating the potential for a re-rating of risk assets as the tail risk of a near-term trade war is partially priced out," said Jeremy Lawson, chief economist at Aberdeen Standard Investments in Edinburgh. "This is especially the case in Asia," he added. Still, fundamental tensions between the US and China "are unlikely to go away and there is a high likelihood that any agreement to suspend tariffs eventually breaks down when it becomes clear that Trump’s objectives cannot really be met." Some investors are also increasingly wary of lingering disputes in Washington over a wall Trump wants on the U.S.-Mexico border, which has led to a weeks-long partial government shutdown. Flanked by border agents who are going without paychecks during the shutdown, Trump again threatened on Thursday to declare a national emergency to bypass Congress to fund a wall. In the foreign exchange markets, the dollar was broadly soft after a small rebound from three-month lows the previous day. The dollar index, measuring it against major peers, dipped 0.1 per cent to 95.38. The euro firmed 0.2 per cent to $1.1523, while the dollar dipped 0.1 per cent to 108.28 yen. The yuan, both onshore and offshore, climbed to the highest levels since late July, aided by a weaker dollar and rising hopes of progress in the US-China talks. In onshore trade, the Chinese currency has risen 1.6 per cent this week, the biggest gain since July 2005 when Beijing abandoned the yuan's peg to the dollar. US Treasury debt prices erased early gains after a soft 30-year bond auction and in reaction to Powell's comments on the Fed "substantially" reducing the size of its balance sheet. The 10-year US Treasuries yield last stood at 2.728 per cent. Crude prices held near one-month highs, but a more than week-long in oil rally slowed as optimism surrounding US-China trade talks faded a little. In Asian trade, West Texas Intermediate crude futures slipped 0.6 per cent to $52.30 per barrel.

Global Markets: Asia stocks reach five-week high, yuan makes big weekly gains

Asian shares edged lower on Tuesday as investors nervously awaited the outcomes of two-day Federal Reserve and Bank of Japan policy meetings. 
 
&quot;The market is more nervous about the BOJ than the Fed as it may give the market a surprise,&quot; said Yutaka Miura, a senior technical analyst at Mizuho Securities. 
 
Global markets have been blowing hot and cold in recent weeks over the Fed&#39;s intentions, which remain far from clarified after both hawkish and dovish comments from several Fed officials. 
 
The consensus is that the Fed will leave interest rates unchanged at the end of its meeting on Wednesday, with investors focusing on the statement as well as Chair Janet Yellen&#39;s speech for clues on the timing of the central bank&#39;s next interest rate increase. 
 
&quot;It&#39;s a lot of uncertainty, leading into the Fed,&quot; said Jennifer Vail, head of fixed income research at U.S. Bank Wealth Management in Portland, Oregon. 
 
While Vail, like most strategists and investors, expects the Fed to refrain from taking any new steps, she said its statement could include language that&#39;s been missing from its recent assessments, such as whether economic risks were &quot;balanced&quot; or &quot;close to balanced.&quot; 
 
MSCI&#39;s broadest index of Asia-Pacific shares outside Japan slipped 0.2 percent, after major US indexes ended a choppy session nearly flat. 
 
Australian shares were 0.2 percent lower. The Australian Securities Exchange opened without incident on Tuesday after technical faults caused extensive disruptions on Monday. 
 
Japan&#39;s Nikkei stock index erased earlier losses and added 0.1 percent, as trading resumed after a public holiday on Monday. Tokyo markets will be closed for another holiday on Thursday, with the highly-anticipated BOJ meeting sandwiched in between the market closures. 
 
The BOJ could make negative interest rates the primary focus of its monetary policy at the conclusion of its meeting on Wednesday, when it conducts what it described as a &quot;comprehensive&quot; assessment of its policies. 
 
Sources have said BOJ policymakers may consider deepening negative interest rates to show its determination to maintain an ultra-easy policy bias. It unveiled the controversial policy in late January. 
 
&quot;The resulting strength of the yen since then can&#39;t really give them a positive outlook on negative rates,&quot; said US Bank Wealth Management&#39;s Vail, adding that &quot;the risk is for lack of any action, given the lack of consensus&quot; among BOJ members. 
 
Rising speculation that the BOJ will stop short of the dramatic action needed to weaken its currency helped send the dollar to a six-day low against the yen of 101.56 yen on Monday. The dollar was last steady on the day at 101.90 yen. 
 
Wary of a flattening Japanese government bond (JGB) yield curve, the BOJ also could seek ways to steepen the curve, such as making its bond buying more flexible. 
 
Policymakers got a taste last week of how markets might react when investors dumped longer-dated bonds on fears the BOJ would slow its purchasing pace. 
 
&quot;We look for the BOJ to take a more flexible stance on the time horizon for reaching its price stability target and on the pace of its JGB purchases, but expect it to refrain from further easing at this meeting,&quot; strategists at Barclays said. 
 
The euro was also steady at $1.1172, remaining well above Monday&#39;s nearly two-week low of $1.1149. 
 
The dollar index, which tracks the greenback against a basket of six major rivals, was slightly higher at 95.874, though it was shy of Friday&#39;s two-week high of 96.108. 
 
US crude oil futures slipped 0.5 percent to $43.07 a barrel, moving further away from overnight highs. Brent edged 0.3 percent lower to $45.82. 
 
Oil had rallied on Monday before settling off its highs on scepticism over Venezuela&#39;s bid to talk up a potential OPEC output freeze, and on indications US crude stockpiles had risen last week. 
 
Spot gold added 0.2 per cent to $1,315.84 an ounce, on expectations that the Fed will stand pat on rates.

(Reuters)

Global markets have been blowing hot and cold in recent weeks over the Fed's intentions, which remain far from clarified

Asian shares edged lower on Tuesday as investors nervously awaited the outcomes of two-day Federal Reserve and Bank of Japan policy meetings. "The market is more nervous about the BOJ than the Fed as it may give the market a surprise," said Yutaka Miura, a senior technical analyst at Mizuho Securities. Global markets have been blowing hot and cold in recent weeks over the Fed's intentions, which remain far from clarified after both hawkish and dovish comments from several Fed officials. The consensus is that the Fed will leave interest rates unchanged at the end of its meeting on Wednesday, with investors focusing on the statement as well as Chair Janet Yellen's speech for clues on the timing of the central bank's next interest rate increase. "It's a lot of uncertainty, leading into the Fed," said Jennifer Vail, head of fixed income research at U.S. Bank Wealth Management in Portland, Oregon. While Vail, like most strategists and investors, expects the Fed to refrain from taking any new steps, she said its statement could include language that's been missing from its recent assessments, such as whether economic risks were "balanced" or "close to balanced." MSCI's broadest index of Asia-Pacific shares outside Japan slipped 0.2 percent, after major US indexes ended a choppy session nearly flat. Australian shares were 0.2 percent lower. The Australian Securities Exchange opened without incident on Tuesday after technical faults caused extensive disruptions on Monday. Japan's Nikkei stock index erased earlier losses and added 0.1 percent, as trading resumed after a public holiday on Monday. Tokyo markets will be closed for another holiday on Thursday, with the highly-anticipated BOJ meeting sandwiched in between the market closures. The BOJ could make negative interest rates the primary focus of its monetary policy at the conclusion of its meeting on Wednesday, when it conducts what it described as a "comprehensive" assessment of its policies. Sources have said BOJ policymakers may consider deepening negative interest rates to show its determination to maintain an ultra-easy policy bias. It unveiled the controversial policy in late January. "The resulting strength of the yen since then can't really give them a positive outlook on negative rates," said US Bank Wealth Management's Vail, adding that "the risk is for lack of any action, given the lack of consensus" among BOJ members. Rising speculation that the BOJ will stop short of the dramatic action needed to weaken its currency helped send the dollar to a six-day low against the yen of 101.56 yen on Monday. The dollar was last steady on the day at 101.90 yen. Wary of a flattening Japanese government bond (JGB) yield curve, the BOJ also could seek ways to steepen the curve, such as making its bond buying more flexible. Policymakers got a taste last week of how markets might react when investors dumped longer-dated bonds on fears the BOJ would slow its purchasing pace. "We look for the BOJ to take a more flexible stance on the time horizon for reaching its price stability target and on the pace of its JGB purchases, but expect it to refrain from further easing at this meeting," strategists at Barclays said. The euro was also steady at $1.1172, remaining well above Monday's nearly two-week low of $1.1149. The dollar index, which tracks the greenback against a basket of six major rivals, was slightly higher at 95.874, though it was shy of Friday's two-week high of 96.108. US crude oil futures slipped 0.5 percent to $43.07 a barrel, moving further away from overnight highs. Brent edged 0.3 percent lower to $45.82. Oil had rallied on Monday before settling off its highs on scepticism over Venezuela's bid to talk up a potential OPEC output freeze, and on indications US crude stockpiles had risen last week. Spot gold added 0.2 per cent to $1,315.84 an ounce, on expectations that the Fed will stand pat on rates. (Reuters)

Asia stocks waver as investors nervously await Fed, BOJ

Asian stocks settled near one-year highs today while the safe-haven yen slumped after Japan&#39;s government announced a larger-than-expected economic stimulus package, which led most of the region&#39;s bourses higher. 
 
Japanese Prime Minister Shinzo Abe said today his government would compile a stimulus package of more than $265 billion to reflate the flagging economy, media reported, though it is unclear how much will be spent to directly boost growth. This would be more than expected earlier, but critics will be watching to see how much is actually new spending. 
 
MSCI&#39;s broadest index of Asia-Pacific shares outside Japan was down 0.1 per cent, reversing earlier gains, having previously climbed to its highest level since August 11, 2015. It has risen 10 per cent so far this month. Japan&#39;s Nikkei rose nearly 2 per cent, leading the region higher. However, mainland China stock indexes bucked the regional rally, falling 2 to 4 per cent in midday trade on worries about regulatory restrictions. 
 
There is a near-consensus view among traders that the Bank of Japan (BOJ) will ease on Friday, most likely by ramping up its already massive purchases of government bonds and riskier assets. 
 
Cutting interest rates into negative territory has proved unpopular with the public and the government, so deepening those cuts is a less likely option, sources familiar with central bank thinking say. 
 
But some market watchers say the BOJ decision is too close to call with many central bank policymakers preferring to hold off on action as they expect a fiscal stimulus package and a delay in next year&#39;s sales tax hike to boost growth. 
 
Major central banks attempting to reflate economy&nbsp; 
 
Pressured by the weakness in Chinese shares, Hong Kong stocks also declined 0.4 per cent though mainland Chinese investors continued to snap up shares through a stock market connection scheme. &quot;Pockets of the world where yield and growth are present will continue to be rewarded by investors,&quot; said Daniel Morris, a senior investment strategist at BNP Paribas Investment Partners, citing India, Indonesia and China consumer-focused plays among his top picks. 
 
&quot;Still, we are cautious on the second half and we don&#39;t think central banks will rush into tightening policy with the global growth outlook bleak and uncertain,&quot; he said. 
 
Since the global financial crisis, major central banks have inflated their balance sheets and injected trillions of dollars to reflate their economies. On a monthly basis, they are adding about $180 billion into the world&#39;s financial system led by the ECB and the BOJ, according to Deutsche Bank.&nbsp; 
 
On Tuesday, US equity markets closed mixed while stocks in Europe traded slightly higher with all eyes were on the Fed, which concludes its two-day policy meeting later today. 
&nbsp; 
The US central bank is widely expected to stand pat on monetary policy and the markets will sift through its statements - a post-meeting news conference will not be held - for any hints of the timing on future interest rate hikes. Expectations of a September increase are clouded ahead of the U.S. presidential election in November, but markets see a roughly 50-50 chance of a rise in December. 
 
Lowdown on currency markets&nbsp; 
 
Price action was messy in currency markets, triggered by Australian price data where core inflation stayed at a record trough, though major pairs clung to well worn trading ranges. 
 
The Australian dollar was a shade weaker at 0.7488 after rising to as high as 0.7568 after the data. Investors slightly reduced the odds of a cut next week to 50 per cent, from 60 per cent before the data. 
 
The dollar was up slightly against a basket of currencies on a trade weighted basis nearing five-month high it hit last week. 
&nbsp; 
Against the yen, it was up 1 per cent at 105.65 after tanking more than 1 per cent overnight. 
&nbsp; 
&quot;It&#39;s good for equities. It&#39;s good for risk,&quot; said Stephen Innes, senior trader for FX broker OANDA in Singapore. &quot;There&#39;s still room for disappointment from the Bank of Japan.&quot; 
&nbsp; 
The euro stood steady at $1.0995 after edging up 0.3 per cent overnight thanks to the greenback&#39;s broad retreat versus the yen. 
&nbsp; 
The pound edged up 0.1 per cent to $1.3114 after touching a two-week low of $1.3057 overnight following dovish statements from Bank of England policymaker Martin Weale. 
&nbsp; 
In commodity markets, crude oil extended losses after suffering big hits overnight on renewed concerns about oversupply. US crude was down 0.05 percent at $42.88 a barrel. The contracts had touched $42.36 on Tuesday, their lowest in three months. 
&nbsp; 
Trade group American Petroleum Institute (API) said Tuesday that US crude stockpiles fell by 827,000 barrels last week, much less than analysts&#39; expectations for a drawdown of 2.3 million barrels. 
&nbsp; 
(Reuters) 
&nbsp;

?Japanese PM Shinzo Abe said today his government would compile a stimulus package of more than $265 billion to reflate flagging economy

Asian stocks settled near one-year highs today while the safe-haven yen slumped after Japan's government announced a larger-than-expected economic stimulus package, which led most of the region's bourses higher. Japanese Prime Minister Shinzo Abe said today his government would compile a stimulus package of more than $265 billion to reflate the flagging economy, media reported, though it is unclear how much will be spent to directly boost growth. This would be more than expected earlier, but critics will be watching to see how much is actually new spending. MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.1 per cent, reversing earlier gains, having previously climbed to its highest level since August 11, 2015. It has risen 10 per cent so far this month. Japan's Nikkei rose nearly 2 per cent, leading the region higher. However, mainland China stock indexes bucked the regional rally, falling 2 to 4 per cent in midday trade on worries about regulatory restrictions. There is a near-consensus view among traders that the Bank of Japan (BOJ) will ease on Friday, most likely by ramping up its already massive purchases of government bonds and riskier assets. Cutting interest rates into negative territory has proved unpopular with the public and the government, so deepening those cuts is a less likely option, sources familiar with central bank thinking say. But some market watchers say the BOJ decision is too close to call with many central bank policymakers preferring to hold off on action as they expect a fiscal stimulus package and a delay in next year's sales tax hike to boost growth. Major central banks attempting to reflate economy Pressured by the weakness in Chinese shares, Hong Kong stocks also declined 0.4 per cent though mainland Chinese investors continued to snap up shares through a stock market connection scheme. "Pockets of the world where yield and growth are present will continue to be rewarded by investors," said Daniel Morris, a senior investment strategist at BNP Paribas Investment Partners, citing India, Indonesia and China consumer-focused plays among his top picks. "Still, we are cautious on the second half and we don't think central banks will rush into tightening policy with the global growth outlook bleak and uncertain," he said. Since the global financial crisis, major central banks have inflated their balance sheets and injected trillions of dollars to reflate their economies. On a monthly basis, they are adding about $180 billion into the world's financial system led by the ECB and the BOJ, according to Deutsche Bank. On Tuesday, US equity markets closed mixed while stocks in Europe traded slightly higher with all eyes were on the Fed, which concludes its two-day policy meeting later today. The US central bank is widely expected to stand pat on monetary policy and the markets will sift through its statements - a post-meeting news conference will not be held - for any hints of the timing on future interest rate hikes. Expectations of a September increase are clouded ahead of the U.S. presidential election in November, but markets see a roughly 50-50 chance of a rise in December. Lowdown on currency markets Price action was messy in currency markets, triggered by Australian price data where core inflation stayed at a record trough, though major pairs clung to well worn trading ranges. The Australian dollar was a shade weaker at 0.7488 after rising to as high as 0.7568 after the data. Investors slightly reduced the odds of a cut next week to 50 per cent, from 60 per cent before the data. The dollar was up slightly against a basket of currencies on a trade weighted basis nearing five-month high it hit last week. Against the yen, it was up 1 per cent at 105.65 after tanking more than 1 per cent overnight. "It's good for equities. It's good for risk," said Stephen Innes, senior trader for FX broker OANDA in Singapore. "There's still room for disappointment from the Bank of Japan." The euro stood steady at $1.0995 after edging up 0.3 per cent overnight thanks to the greenback's broad retreat versus the yen. The pound edged up 0.1 per cent to $1.3114 after touching a two-week low of $1.3057 overnight following dovish statements from Bank of England policymaker Martin Weale. In commodity markets, crude oil extended losses after suffering big hits overnight on renewed concerns about oversupply. US crude was down 0.05 percent at $42.88 a barrel. The contracts had touched $42.36 on Tuesday, their lowest in three months. Trade group American Petroleum Institute (API) said Tuesday that US crude stockpiles fell by 827,000 barrels last week, much less than analysts' expectations for a drawdown of 2.3 million barrels. (Reuters)

Asian stocks respond to Japan stimulus, settle near one-year highs

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