Asia shares firm as Trump agrees to meet North Korean leader

Asia Stock Markets

Asian shares pared sharp early gains on Friday ahead of U.S. payrolls data which could hasten Federal Reserve rate hikes, and as some caution set in about the new entente between North Korean leader Kim Jong Un and U.S. President Donald Trump. 

Kim has committed to “denuclearization” and offered to hold the first-ever U.S.-North Korea summit, marking a potentially dramatic breakthrough in the North Korea nuclear standoff. 

Trump’s aides have been wary of North Korea’s diplomatic overtures because of its history of reneging on international commitments. 

The jubilation about the informal alliance did not last long as equity investors booked profits while futures for the S&P 500 and FTSE inched lower.

Japan’s Nikkei was last 0.3 percent firmer, having been up more than 2 percent at one stage. South Korean stocks eased too but were still 1 percent higher. 

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.6 percent, while Australia firmed 0.3 percent. 

The mood had already brightened a little after Trump pressed ahead with tariffs but offered conditional exemptions for Canada and Mexico, offering at least the hope that a full-blown global trade war could be averted.

The White House said other countries could apply for exemptions on the 25 percent tariff on steel imports and 10 percent for aluminum, but details were sparse on when they might be granted and under what terms. 

Several major trading partners have said they will respond with tariffs or direct action of their own.

Rising protectionism was a risk cited overnight by European Central Bank President Mario Draghi following the central bank’s latest policy meeting.

While the ECB did drop its easing bias as some expected, Draghi sounded in no rush to start unwinding stimulus.

The dovish tone was enough to see the euro fade back to $1.2310, having shed 0.8 percent on Thursday. That helped the U.S. dollar firm on a basket of currencies to 90.189.

The dollar gained 0.4 percent on the yen to 106.63, amid the recovery in risk appetite.