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Asia shares cautiously, seeking Chinese-American clarity



SYDNEY (Reuters) – Asian stock markets were in a cautious mood on Thursday when investors hung on for some hint of progress in recent Chinese-US tariff negotiations on White House reports could extend the deadline for an agreement.

FILE PHOTO: Pedestrians reflected on an electronic board showing stock prices outside a brokerage in Tokyo, Japan December 27, 2018. REUTERS / Kim Kyung-Hoon

Bloomberg reported that President Donald Trump is considering pushing back the 60-day deadline, with reference to people who are familiar with the case.

On Wednesday, Trump had said the talks went "very well" as they attempted to resolve the dispute before the 1st of March.

With state secretary Steven Mnuchin and trade representative Robert Lighthizer in China for high-level talks, investors had been bold to hope for good news.

Since there has been disappointment before, the stock market reaction was preserved. Shanghai Blue chips were down 0.2 percent, having jumped 2 percent on Wednesday to levels last seen in late September.

MSCI's widest index for Asia-Pacific stocks outside Japan increased 0.2 percent, but it was a top last seen in early October.

Japan's Nikkei increased 0.1 percent to its highest for the year as a weakening yen increased export stocks. E-Mini futures for S & P 500 added 0.15 percent.

The Australian dollar, often used as a liquid proxy for China, increased 0.4 percent to $ 0.7114.

Aussie had already gained a slight boost when Chinese trading data gently beat expectations in a welcome relief for the world economy.

Beijing reported exports rose 9.1 percent in January from the previous year, confusing forecasts for a fall, while imports doubled with a surprisingly small 1.5 percent.

There was some hope that another US government shutdown would be averted as Trump sided with supporting a congressional funding agreement for a frontier barrier.

DOLLAR BEST OF BAD BUNCH

In the foreign exchange markets, the improvement in risk aversion undermined the security yen and drove the dollar to the best level of the year so far at 111.05.

The euro took a hit from dire data on European industrial production which pushed the long-term market inflation expectations for new downturns, while putting down on bond yields in the block.

The only currency was last at $ 1.1280 and still over the floor in a $ 1,1213 / 1,1570 trading range that has held since mid-October.

Sterling was also on the verge of $ 1,1860 before another parliamentary vote on British Prime Minister Theresa Mays Brexit's plan.

All who left the dollar close to their highest since mid-December on a basket of currencies of 97,059.

In commodity markets, spot gold increased 0.18 percent to $ 1.308.56 per ounce.

Oil prices found support as top exporter Saudi Arabia said it would cut raw exports and deliver even deeper cuts to production. [O/R]

U.S. crude was 24 cents at $ 54.14 a barrel, while Brent crude futures increased 32 cents to $ 63.93.

Editing by Shri Navaratnam and Richard Borsuk

Our Standards: Thomson Reuters Trust Principles.

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