Volkswacht Bodensee - Asian markets rally ahead of latest China-US trade talks

The gains extended a run-up across global markets in recent weeks as fears about Donald Trump's tariff blitz subside and countries make deals with Washington.

All eyes are on London, where top officials from China and the United States are due to meet for more negotiations aimed at preserving a fragile truce agreed last month that slashed eye-watering tit-for-tat levies.

The talks come days after Trump and Chinese counterpart Xi Jinping held their first publicly announced telephone talks since the US president returned to the White House.

They were helped by news that Beijing had on Saturday approved some applications for rare-earth exports, while plane giant Boeing will start sending commercial jets to China for the first time since April.

Optimism that the two sides will make a breakthrough boosted Asian markets, with Hong Kong up more than one percent, while Tokyo, Shanghai, Seoul, Singapore, Taipei and Manila also advanced.

The gains followed a strong lead from Wall Street, where all three main indexes closed more than one percent higher after figures showing the world's largest economy created a forecast-beating 139,000 jobs last month.

While the figures for the previous two months were revised down, the data indicated that the economy remained robust, and tempered worries sparked by Wednesday's report by payroll firm ADP showing a big miss on private hiring.

Eyes will now turn to the Federal Reserve as it decides whether to lower interest rates, with many economists warning that Trump's tariffs could reignite inflation, hit supply chains and drag on consumer sentiment.

"The May minutes and recent comments by several (policy board) members... suggest the Fed is highly attentive to the risk that tariffs will lead to a persistent inflation shock," wrote analysts at Bank of America.

"Those risks could come into focus for markets by the fall."

Michael Hewson at MCH Market Insights remained positive for the outlook for the US economy.

"For now, the US economy continues to look reasonably resilient although the recent ADP jobs report showed some evidence of a slowdown in May," he said in a commentary.

"However on the whole there is little sign that the economy is on the cusp of an economic shock at the moment, despite the unpredictable nature of the current US administration."

- Key figures at around 0230 GMT -

Tokyo - Nikkei 225: UP 1.1 percent at 38,137.09 (break)

Hong Kong - Hang Seng Index: UP 1.6 percent at 24,160.62

Shanghai - Composite: UP 0.4 percent at 3,399.65

Euro/dollar: UP at $1.1415 from $1.1397 on Friday

Pound/dollar: UP at $1.3553 from $1.3529

Dollar/yen: DOWN at 144.52 yen from 144.81 yen

Euro/pound: DOWN at 84.22 pence from 84.23 pence

West Texas Intermediate: DOWN 0.1 percent at $64.52 per barrel

Brent North Sea Crude: DOWN 0.1 percent at $66.41 per barrel

New York - Dow: UP 1.1 percent at 42,762.87 (close)

London - FTSE 100: UP 0.3 percent at 8,837.91 (close)

R.Kloeti--VB