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GLOBAL MARKETS-Asia stocks inch up but gains capped by fresh Sino-U.S. trade worries

Published 2019-08-08, 09:11 p/m
© Reuters.  GLOBAL MARKETS-Asia stocks inch up but gains capped by fresh Sino-U.S. trade worries
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* MSCI APAC ex-Japan up 0.2% but still down 2.3% for week

* Report on Huawei licenses casts new shadow on U.S.-China trade war

* U.S. Treasury yields rise

* Oil jumps on hopes of more OPEC cuts; Gold holds near 6 yr high

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

By Tomo Uetake

TOKYO, Aug 9 (Reuters) - Asian shares caught the tail of a Wall Street rally on Friday, helped by China's better-than-expected export figures but fresh concerns about Sino-U.S. trade ties are likely to limit gains in the region.

Weighing on risk appetite was a report from Bloomberg that Washington is delaying a decision about licenses for U.S. firms to restart trade with Huawei Technologies HWT.UL . That sent U.S. stock futures ESc1 down as much as 0.6% in early Asian trade. They were last quoted 0.4% lower on the day. broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS rose 0.2% but was on track to lose 2.3% for the week.

Japan's Nikkei average .N225 advanced 0.6%, while Australian stocks .AXJO stood flat and South Korean stocks .KOSPI gained 1.0%.

On Wall Street, the S&P 500 .SPX registered its largest one-day percentage gain in about two months on Thursday, with the Dow .DJI and the Nasdaq .IXIC also climbing more than 1%. .N

However, that optimism was dented by the Bloomberg report, which has reinforced concerns the deterioration in U.S.-China relations will place additional strain on an already fragile global economy.

"The news about Huawei triggered the rise in the yen," said Junichi Ishikawa, senior foreign exchange strategist at IG Securities in Tokyo. "This is a reminder that the U.S.-China trade dispute remains a risk, and this risk is not receding."

The yen strengthened as much as 0.4% against the dollar to 105.70 yen on a fresh worries triggered by a Bloomberg report.

U.S. data pointed to a robust labour market as the number of Americans filing applications for unemployment benefits unexpectedly fell last week, allaying some worries about a recession and helping Treasury yields rise. 10-year Treasury yields US10YT=RR closed 2.4 basis points higher at 1.715% after hitting 1.595% on Wednesday, which was their lowest level since October 2016.

The offshore yuan was stable versus the dollar in early trade but could be closely watched as traders assess the latest developments in the rapidly escalating trade war between the United States and China.

"The U.S.-China trade war is very serious. My hope is that the United States and China can find enough to agree on so that they can contain the push-and-shove that occurs when the emerging power meets the dominant power. The alternative is not pleasant," said veteran investor Dan Fuss, vice chairman of Loomis Sayles.

"I think the rate cuts by the Asian central banks were in response to the weakening business environment due to the trade wars. The Fed is influenced by the same things and that will probably cause a further rate cut here."

Central banks in New Zealand, Thailand and India stunned financial markets on Wednesday with a series of surprising interest rate cuts and pointing to policymakers' dwindling ammunition to fight off a downturn. Thursday, the Philippine central bank joined the bandwagon and cut its key policy rates, whilst keeping the door open for further easing. jumped more than 2% on Thursday on expectations that falling prices could lead to production cuts. O/R

Brent crude LCOc1 rose 0.4% to $57.63 per barrel and U.S. West Texas Intermediate (WTI) CLc1 crude climbed 0.5% to $52.79.

Spot gold XAU= held near the more than six-year peak touched Wednesday, with rising 0.3% to $1,505.20 an ounce as investors sought the safety of the precious metal.

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