Shares hit 7-mo high

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    SINGAPORE- Asian shares hit a 7-month high, China’s yuan jumped and safe-harbor assets slipped on Tuesday, amid signs of goodwill between China and the United States, as the world’s two biggest economies prepared to sign a truce in their trade war.

    The US Treasury Department on Monday said China should no longer be designated a currency manipulator – a label it applied as the yuan dropped in August.

    China, meanwhile, allowed the tightly managed currency to climb to its highest point since July, after fixing the yuan’s trading-band midpoint at its firmest in more than five months.

    The yuan sat 0.4 percent firmer at 6.8677 per dollar by mid session.

    The moves come as a Chinese delegation arrived in Washington ahead of Wednesday’s signing of the Phase 1 trade agreement, seen as calming a dispute that has upended the world economy.

    MSCI’s broadest index of Asia-Pacific shares outside Japan hit its highest since June in morning trade, driving world stocks to a record high.

    Japan’s Nikkei added 0.7 percent and hit its highest point in a month. Hong Kong’s Hang Seng rose to its highest since May and Shanghai blue chips scaled heights not touched since January 2018, though both later pared gains.

    Australia’s S&P/ASX 200 rose 0.7 percent to a record intraday high. Gold fell and the safe-harbor Japanese yen dropped to a seven-month low.

    “There have been a number of false starts,” said Vishnu Varathan, head of economics at Mizuho Bank in Singapore.

    “The fact that this is really coming to the moment when the rubber hits the road is the most tangible evidence of traction in starting to resolve issues, that’s what’s driving optimism.”

    Chinese economic data showing rising exports and imports in December also put a floor under gains.

    Overnight Wall Street logged record closing highs, helped by sharp rises in technology stocks as investors bet firms such as Facebook Inc, Microsoft Corp and Apple Inc might have the most to gain from revived global growth.

    The S&P 500 rose 0.7 percent to a record closing high, while the Nasdaq Composite added 1 percent and also closed at a record peak. The Dow Jones Industrial Average rose 0.29 percent. – Reuters