Asia markets rise on trade hopes, tentative deal to avert US government shutdown

Asian markets mostly rose on Feb 12, 2019.
Asian markets mostly rose on Feb 12, 2019.PHOTO: AFP

HONG KONG (AFP) - Asian shares were mostly up Tuesday (Feb 12) as investors watched key US-China trade talks aimed at averting punitive tariffs which could slow the global economy, and a weak yen boosted exporters.

Markets were also lifted by a tentative deal to avert a new government shutdown.

Initial trade talks are under way in Beijing, and top-level negotiations are set for Thursday and Friday, as the deadline looms for a deal to prevent a sharp rise in United States duties on billions of dollars worth of Chinese goods.

"Officials on both sides of the US-China trade talks expressed satisfaction with the progress thus far," wrote Mr Jeffrey Halley, senior analyst at Oanda, in a commentary.

Failure to agree a deal between the two economic superpowers before March would see tariffs on US$200 billion (S$272 billion) worth of Chinese imports more than double.

Washington is demanding far-reaching changes from Beijing on what it says are unfair commercial practices, including theft of intellectual property and barriers to foreign firms in Chinese markets.

While Hong Kong edged down 0.1 per cent, Shanghai gained 0.3 per cent and Tokyo - returning from Monday's public holiday - rose 2 per cent.

Japanese exporters benefited as a resurgent dollar left the yen at its weakest level in six weeks.

The US dollar has returned to early January levels on the US currency's longest unbroken rally in two years, as concern builds over poor growth forecasts in Europe and elsewhere.

Several central banks have fallen in line with the Fed's dovish stance since it held interest rates unchanged two weeks ago.

Tokyo-listed exporters such as Toyota, Nissan, Honda, Panasonic all saw gains.

Sydney rose 0.4 per cent, Taipei added 0.7 per cent and Seoul 0.5 per cent.

Meanwhile US senators announced that an agreement in principle had been reached to avoid a new government shutdown at the end of the week.

Lawmakers had warned in recent days of a budget impasse in talks dominated by US President Donald Trump's demand for funds to build a Mexico border wall.

But Senator Richard Shelby, a key Republican negotiator, said a deal had been reached late Monday.

Elsewhere, the British pound clawed back some losses after dropping on dismal monthly gross domestic product and manufacturing data.