* U.S., China seen nearing truce in trade war
* Strong U.S. jobs data underpins optimism on economy
* Yuan at highest since mid-Aug despite PBOC cut
* European shares seen rising 0.2-0.4%
* Asian stock markets: https://tmsnrt.rs/2zpUAr4
By Hideyuki Sano
TOKYO, Nov 5 (Reuters) - Asian shares vaulted to six-month
highs on Tuesday, surpassing their July peaks, as hopes that
Washington may roll back some of the tariffs it has imposed on
imports from China shored up optimism on the global economic
outlook.
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS gained 0.5% to reach levels last seen in early
May, led by gains in Chinese shares.
The CSI300 of mainland Chinese shares .CSI300 jumped 1.3%
to move above double-tops marked in the past two months to hit
their highest levels since late April, also helped by the
People's Bank of China cutting a medium-term lending rate.
Taiwanese shares .TWII gained 0.4% to near three-decade
highs while Japan's Nikkei .N225 rose 1.34% to a one-year peak
after a market holiday on Monday
The bright mood in Asia is seen extending into the European
morning, with pan-European Euro Stoxx 50 futures STXEc1 up
0.3%, German DAX futures FDXc1 0.21% higher, and FTSE futures
FFIc1 gaining 0.49%.
U.S. S&P500 futures ESc1 gained 0.2% in Asia after the
Financial Times reported 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. China is pushing U.S. President Donald Trump to remove more
tariffs imposed in September as part of a "phase one" U.S.-China
trade deal, expected to be signed later this month, people
familiar with the negotiations said on Monday. "There may have been some expectations that the U.S. may
postpone the remaining tariffs, which are due to kick in on Dec.
15. But if it goes further by rolling back existing tariffs,
that would not only benefit the economy but would also make the
truce seem more permanent," said Yukino Yamada, senior
strategist at Daiwa Securities.
Already on Monday on Wall Street, the S&P 500 .SPX gained
0.37% to a record high of 3,078.27 while the Dow Jones .DJI
and the Nasdaq .IXIC also clinched all-time highs on hopes of
the "phase one" deal on trade.
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.
The next focus on the U.S. economic front is U.S.
non-manufacturing survey due later on Tuesday, with economists
expecting a rebound in business sentiment from a three-year low.
Bonds are losing some of their appeal and the yield on
benchmark 10-year notes rose back to 1.805% US10YT=RR compared
to last week's low of 1.670%.
In the currency market, the dollar gained 0.2% on the yen
to 108.80 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 7.0162 per dollar
CNY=CFXS , up 0.2% 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 yuan 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 was little changed at $1.1126 EUR= , off last
week's high of $1.1175.
The Australian dollar tacked on 0.2% to $0.6900 AUD=D4
after the nation's central bank held interest rates steady, as
expected, as it gauged the impact of the three cuts already
delivered this year.
Oil prices firmed, staying near 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
$56.62 per barrel, up 0.14% after having hit a six-week high of
$57.43 on Monday.
International benchmark Brent LCOc1 gained 0.23% to $62.27
per barrel.
Rising economic optimism dented gold, which fell 0.47% to
$1,503 per ounce XAU= .
U.S. non-manufacturers ISM index https://tmsnrt.rs/2JMLMjB
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(Editing by Lincoln Feast & Shri Navaratnam)