GLOBAL MARKETS-Yuan soars, stocks scale heights as markets cheer imminent Sino-U.S. deal signing

* Imminent trade deal drives optimism

* World stocks at record high as Asian markets gain

* Safe-harbour yen drops to 7-month low

* Asian stock markets: https://tmsnrt.rs/2zpUAr4

By Tom Westbrook

SINGAPORE, Jan 14 (Reuters) - Asian shares hit a 7-month

high, China's yuan jumped and safe-harbour 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 U.S. 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% 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

.MIAPJ0000PUS hit its highest since June in morning trade,

driving world stocks to a record high .MIWD00000PUS .

Japan's Nikkei .N225 added 0.7% and hit its highest point

in a month. Hong Kong's Hang Seng .HSI rose to its highest

since May and Shanghai blue chips scaled heights not touched

since January 2018 .CSI300 , though both later pared gains.

Australia's S&P/ASX 200 .AXJO rose 0.7% to a record

intraday high. Gold fell and the safe-harbour Japanese yen

JPY= 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 FB.O , Microsoft Corp MSFT.O and Apple Inc

AAPL.O might have the most to gain from revived global growth.

The S&P 500 .SPX rose 0.7% to a record closing high,

while the Nasdaq Composite .IXIC added 1% and also closed at a

record peak. The Dow Jones Industrial Average .DJI rose 0.29%.

With the text of the Sino-U.S. deal yet to be finalised,

some fretted the gains could leave stocks exposed should

anything go awry, with modest volumes in equity markets hinting

at caution.

"The market appears to be fully pricing a signed agreement,"

said CMC Markets' chief strategist in Sydney, Michael McCarthy.

"It's buy the rumour, sell the fact... Even a delay could

see an extremely negative reaction," he said.

United States Trade Representative Robert Lighthizer told

Fox Business late on Monday that the Chinese translation of the

deal's text was almost done. "We're going to make it public on Wednesday before the

signing," he said.

YEN, GOLD SLIP

In tandem with the rally, safe-harbour assets slid lower on

Tuesday. Gold extended Monday's fall to trade 0.6% weaker at

$1538.76 per ounce. GOL/

Oil nursed losses and yields on benchmark U.S. Treasuries

rose as prices fell. Brent Crude LCOc1 was steady around

$64.37 per barrel. Ten-year Treasury note yields US10YT=RR

rose to 1.8599% compared with the U.S. close of 1.848%. O/R

In currency markets, the yen weakened past the 110

yen-per-dollar mark while the yuan's strength helped lift

trade-exposed currencies across Asia. FRX/

Besides the trade deal, investors are also looking to U.S.

inflation data due later on Tuesday and the beginning of the

fourth-quarter U.S. company results season.

Big banks JPMorgan Chase & Co JPM.N , Citigroup Inc C.N

and Wells Fargo & Co WFC.N are due to report earnings before

market open on Tuesday.

U.S. Treasury drops China currency manipulator label ahead of

trade deal signing White House plans US-China Phase 1 ceremony, still no final

deal text Dec yuan-denominated exports up 9%, imports up 17.7%

Lighthizer says nearly done with translation of China trade

deal businesses hold back, U.S. consumers seen boosting

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