Asia report: Markets rise on US trade talk optimism, PBoC confidence

Asian markets followed US indices higher overnight, with investors optimistic that the US will delay the imposition of 5% tariffs on Mexican goods that is set to go into force next week.

The boost to investor confidence comes after US Vice President Mike Pence said he was ‘encouraged’ by the discussions with America's southern neighbour, after Mexico offered to deploy 6,000 members of its new National Guard police force to the border between the two nations, although he reiterated that the tariffs remain slated for Monday.

Uncertainty surrounding US trade negotiations with Mexico and China has been causing turbulence on global markets for months.

Michael Hewson, chief market analyst at CMC Markets UK, said: "Optimism over progress on taking steps to curb migrant flows at the US’s southern border has risen after US vice president Mike Pence said he was encouraged by the talks. As a result US stocks look set to post their first positive week since April, though some of these gains can also be attributed to much more dovish expectations over the direction of US interest rates."

And People's Bank of China Governor Yi Gang told Bloomberg the country had "tremendous" leeway remaining to apply further monetary or fiscal stimulus should trade tensions with Washington worsen.

Japan's Nikkei 225 was up 0.53% at 20,884.71, with Yahoo climbing 2.41%, Japan Steel up by 2.17% and Nintendo rising 1.48%, while the Japanese yen dropped by 0.18% against the US dollar to JPY108.60.

Meanwhile, markets in Hong Kong, mainland China and Taiwan were closed for a holiday.

South Korea's Kospi index was up 0.16% at 2,072.33 as index bellwether Samsung Electronics rose by 0.68%, while other major players LG Electronics and SK Hynix were higher.

Brent Crude was up 1.00% at $62.29 and WTI climbed 0.96% higher to $53.10 despite Russian president Vladimir Putin saying his country had differences with OPEC over what constituted a fair price for oil, as reports early on Friday suggested that Moscow would adhere to any extension of production curbs by OPEC.

Down under, the Australian S&P/ASX 200 rose by 0.95% to 6,443.89 as the energy sector was the standout gainer, climbing 1.2% following the 1.7% spike in global crude prices.

Meanwhile, Marley Spoon's shares soared by 68% after the meal kit company signed a $30m deal with Woolworths.

New Zealand's S&P/NZX 50 was 0.61% higher at 10,047.82 as Synlait Milk finished the session 4.00% higher said it will take its fight to get covenants removed from its new Pokeno site to the Supreme Court.

Finally, the Australian dollar was down 0.15% against the US dollar at AU$1.44, while New Zealand's dollar edged 0.03% lower to $1.51.