Asian shares climb, dollar eases ahead of US-China talks
TOKYO: Shares jumped and the dollar pared recent gains on Monday as Asian markets reacted to better-than-expected US jobs data ahead of talks in London aimed at mending a trade rift between the United States and China.
Wall Street stocks had closed sharply higher on Friday after the jobs data eased concerns about damage to the world's biggest economy from President Donald Trump's unpredictable tariff regime. Safe-haven assets such as gold remained lower after steep selloffs.
MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.5 per cent in early trade on Monday. Hong Kong's Hang Seng Index surged 1.3 per cent, touching the 24,000-point level for the first time since March 21. Japan's Nikkei stock index rose 0.9 per cent.
At the same time, a standoff in Los Angeles that led to Trump calling in the California National Guard to quell demonstrations over his immigration policies weighed on sentiment.
The dollar slid 0.3 per cent against the yen to 144.39, trimming its 0.9 per cent jump on Friday. The European single currency was up 0.2 per cent on the day at US$1.1422.
Top trade representatives from Washington and Beijing are due to meet for talks expected to focus on critical minerals, whose production is dominated by China. The discussions follow a rare call last week between Trump and Chinese President Xi Jinping.
"Trade policy will remain the big macro uncertainty," said Kyle Rodda, a senior financial market analyst at Capital.com. "Signs of further momentum in talks could give the markets fresh boost to kick-off the week."
US Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick and Trade Representative Jamieson Greer will represent Washington in talks with China, Trump said in a social media post. China's foreign ministry said Vice Premier He Lifeng will be in Britain for the first meeting of the China-US economic and trade consultation mechanism.
US employers added 139,000 jobs in May, data showed on Friday, fewer than the 147,000 jobs added in April, but exceeding the 130,000 gain forecast in a Reuters poll of economists. Attention now turns to inflation data on Wednesday that will feed into expectations for the timing of any rate cuts by the Federal Reserve.
Markets are facing "mixed fortunes" on Monday as they balance optimism over trade and the US economy against the potential for social unrest in California, said Jeff Ng, Head of Asia Macro Strategy at SMBC.
"The trade talks, if there's any progress, may help as well, but markets may not have priced in a lot of breakthrough for that," Ng said. "In the meantime, we are also quite cognizant that in the US there are protests in L.A. and the National Guard is also being sent in, so we have to be on the watch for event risk as well."
Spot gold fell 0.2 per cent to US$3,303.19 an ounce. US crude was little changed at US$64.56 a barrel after a two-day gain.
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