TOKYO- Asian shares extended gains and US stock futures jumped after China said it will hold trade talks with the United States in early October, raising hopes they can de-escalate their trade war before it inflicts further damage on the global economy.
MSCI’s broadest index of Asia-Pacific shares outside Japan was up 1.08 percent at its highest since Aug. 2, while the Shanghai composite index surged 1.7 percent. Japan’s Nikkei added 2.4 percent.
US stock futures ESc1 reversed early losses and rose 1 percent.
Pan-European Euro Stoxx 50 futures were up 1.01 percent, with Germany’s DAX futures up 1.04 percent and FTSE futures up 0.64 percent.
The Chinese yuan jumped versus the dollar in offshore trade, while safe-have assets such as gold, the Swiss franc, and the yen fell.
China’s confirmation of trade talks added to upbeat geopolitical news overnight. A parliamentary vote in Britain put the brakes on the nation’s no-deal exit from the European Union, Hong Kong withdrew a contentious extradition bill that sparked recent protests and political turmoil in Italy appeared to be easing.
China’s Commerce Ministry said its trade team will consult with their US counterparts in mid-September in preparation for negotiations in early October, hinting at progress in reducing trade friction.
Both sides had agreed to take actual actions to create favorable conditions, the ministry added, without giving more details.
“Since yesterday, there has been limited downside in markets because of what happened in Hong Kong, but now the US-China talks are the story,” said Masayuki Kichikawa, chief macro strategist at Sumitomo Mitsui Asset Management Co in Tokyo.
“It’s the same about Brexit, which means less downside risk.”
Any sign that Washington and Beijing are closer to scaling back or resolving their trade dispute would lift a significant burden from the global economy, but many analysts believe the two sides are dug in for a longier and costlier battle.
Hong Kong shares erased early losses to rise 0.3 percent. They had jumped in afternoon trade on Wednesday after leader Carrie Lam said she was withdrawing an extradition bill that had triggered months of often violent protests in the Asian financial hub. – Reuters