* U.S., China seen nearing truce in trade war
* Strong U.S. jobs data underpins optimism on economy
* Asian stock markets: https://tmsnrt.rs/2zpUAr4
By Hideyuki Sano
TOKYO, Nov 5 (Reuters) - Asian shares approached their July
peak on Tuesday on signs the United States and China are inching
closer to a truce in their trade war and on optimism the U.S.
economy is poised for solid, consumer-driven growth.
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS ticked up 0.1% after hitting a four-month high
the previous day.
China's mainland shares were little changed .SSEC while
Japan's Nikkei .N225 rose 1.34% to one-year high after a
market holiday on Monday.
On Wall Street, the S&P 500 .SPX gained 0.37% to a record
high of 3,078.27 on Monday while the Dow Jones .DJI and the
Nasdaq .IXIC also clinched all-time highs.
In Europe, shares rallied more than 1%, with many reaching
their highest level since January 2018. The STOXX 600 index
.STOXX of small, mid-sized and large companies across Europe
surged to highs last seen in July 2015.
U.S. S&P500 futures ESc1 gained a further 0.2% in Asia
after the Financial Times reported on Tuesday that the United
States is considering rolling back levies on $112 billion of
Chinese imports, which were introduced at a 15% rate on Sept. 1.
The story came after Beijing and Washington spoke of
progress in trade talks on Friday and U.S. Commerce Secretary
Wilbur Ross said licenses for U.S. companies to sell components
to China's Huawei Technologies Co will come "very shortly."
"Economic uncertainties are receding. That means those who
had held off their activities, both in the real economy and
financial markets, are getting active," said Masaru Ishibashi,
joint general manager of trading at Sumitomo Mitsui Bank.
Chinese President Xi Jinping said on Tuesday the global
community needs to bring down trade barriers. U.S. employment data released on Friday showed strong job
gains despite the drag from a strike at General Motors GM.N ,
offering some assurance that consumers would continue to support
the slowing economy. "The data suggests the U.S. is almost in a full employment.
More importantly those strong numbers came after three rate cuts
by the Fed," said Norihiro Fujito, chief investment strategist
at Mitsubishi UFJ Morgan Stanley Securities.
"When the Fed did precautionary easing in the past - after
Mexico crisis in 1994 and Asia/Russian crisis in 1997-98 - a
rally in stock prices followed. No wonder money is flowing to
risk assets now," he said.
Bonds are losing some of their appeal and the yield on
benchmark 10-year notes rose back to 1.799% US10YT=RR compared
to last week's low of 1.670%.
In the currency market, the dollar gained to 108.60 yen
JPY= , extending its recovery from 107.89 touched on Friday.
Trade optimism kept the Chinese yuan near its highest levels
since mid-August, with the onshore yuan at 7.0259 per dollar
CNY=CFXS , up slightly on the day.
The currency maintained gains even after China's central
bank cut its one-year medium-term lending facility (MLF) rate by
5 basis points, for the first time since early 2016.
The currency shrugged off the Caixin/Markit services
purchasing managers' index (PMI) showing China's services sector
activity expanded at its slowest pace in eight months in
October. The euro changed hands at $1.1125 EUR= , off last week's
high of $1.1175.
The Australian dollar traded at $0.68805 AUD=D4 , staying
near one-week low after a dire set of retail sales numbers
released on Monday suggested the economy was still struggling
despite three cuts in interest rates. Still, that has did little to change market expectations
that the Reserve Bank of Australia is expected to hold fire at
its interest rate decision on Tuesday. Oil prices ticked lower in Asia but stayed not far from
their highest levels since late September, buoyed by an improved
outlook for crude demand as better-than-expected U.S. jobs
growth added to market hopes a preliminary U.S.-China trade deal
would be reached this month.
U.S. West Texas Intermediate (WTI) crude CLc1 traded at
$56.42 per barrel, down 0.21% after having hit a six-week high
of $57.43 on Monday.
(Editing by Lincoln Feast)