The gains extended a run-up across global markets in recent weeks as fears about Donald Trump’s tariff blitz subsided and countries made deals with Washington.
All eyes are on London, where top officials from China and the US 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 1%, 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 1% 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 (Fed) 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,” analysts said.
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,.” Hewson added.