* MSCI Asia ex-Japan up 0.5%, highest since Aug 1
* Europe set for higher open; ECB easing encourages markets
* Trump wants full deal with Beijing after goodwill gestures
* Asian stock markets: https://tmsnrt.rs/2zpUAr4
By Hideyuki Sano and Noah Sin
TOKYO/HONG KONG, Sept 13 (Reuters) - Asian stocks climbed to
their highest in six weeks on Friday, as signs of progress in
U.S.-China trade talks and aggressive stimulus from the European
Central Bank helped to calm fears of a global economic slowdown.
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS edged up 0.5% to their highest since Aug. 1,
while Japan's Nikkei .N225 rose more than 1.0% to four-month
highs. Markets in mainland China and South Korea were closed for
public holidays.
European stocks are set to track Asia's firmer tone, with
pan-region Euro Stoxx 50 futures STXEc1 up 0.1%, Germany's DAX
futures FDXc1 up 0.1% and London's FTSE futures FFIc1
higher by 0.2%.
"Risk assets should find further support from accommodative
policies, which are set to remain in vogue for some time, and
not just in Europe as seen in the global easing trend," said
Esty Dwek, head of global market strategy at Natixis in Geneva,
Switzerland.
"Nonetheless, we believe that trade uncertainty and growth
concerns will not vanish, so any reprieve on either subject will
be welcome. We also believe that some earnings growth will be
needed for equities to grind higher," she said.
The United States on Thursday welcomed China's renewed
purchases of U.S. farm goods while maintaining the threat of
U.S. tariff hikes as the world's two largest economies prepared
for talks aimed at breaking their trade war impasse.
Trump said he preferred a comprehensive trade deal with
China but did not rule out the possibility of an interim pact,
even as he said an "easy" agreement would not be
possible. Investors bet optimism will prevail in the near future
though most economists in a Reuters poll believed the trade
dispute will worsen or at best stay the same over the coming
year. The U.S. S&P 500 closed within striking distance of its
all-time closing high, rising 0.29% to 3,009.57, near a record
closing high of 3,024.50 marked in late July. .N
The Philadelphia semiconductor share index .SOX hit an
all-time high while MSCI ACWI .MIWD00000PUS also came near
this year's peak after seven straight days of gains by Thursday.
Sentiment found modest support from Trump's planned tax
overhaul aimed at middle-income households next
year.
CENTRAL BANKS
On Thursday, the European Central Bank delivered
bigger-than-expected stimulus, cutting interest rates by 0.10
percentage point to minus 0.50%, promising that rates would stay
low for longer and restarting bond purchases of 20 billion euros
a month from November. The resumption of quantitative easing had been seen as a
close call and helped to boost risk assets.
But the euro quickly lost steam and European bond yields
also rose as profit-taking set in.
ECB President Mario Draghi stepped up his rhetoric in
calling for governments to spend their way out of a slowdown,
highlighting the limitations of monetary policy and also fanning
expectations of fiscal spending down the road.
The euro stood at $1.1085 EUR= near the two-week high hit
in U.S. trade, having risen 0.5 percent on Thursday.
Rising risk appetite kept the yen near its six-week low of
108 to the dollar JPY= .
Ten-year German Bund yields also rose back to minus 0.503%
That also helped keep the yield on 10-year U.S. Treasuries
at 1.7838% US10YT=RR , near early August levels, breached in
Thursday's session.
Fed funds rate futures FEDWATCH imply a 0.25 percentage
point interest rate cut by the Fed next week but have
effectively priced out any chance of a larger cut.
The Fed will announce its policy on Wednesday, followed by
the Bank of Japan (BOJ) on Thursday.
Sources told Reuters the BOJ is leaning towards standing pat
next week if markets are calm, but is brainstorming ways to
deepen negative interest rates at minimal cost. "I think a rally in stock prices will run out of steam soon.
It's typical buy-on-rumour-sell-on-fact trade on central bank
stimulus and will be over by the Fed and the BOJ's meetings,"
said Tatsushi Maeno, senior strategist at Okasan Asset
Management.
"People also seem to think there will be a deal between
China and the States soon but you never know when suddenly Trump
(does an) about-face. We just saw that in May and August," he
added.
Trump unveiled a hike in tariffs on $200 billion worth of
Chinese imports in early May and announced another 10% tariff on
the remaining $300 billion imports from China in early August.
U.S. stock prices were at record levels on both occasions.
Oil prices were on course to post weekly losses, on
continued worries about weakening demand and on speculation
Trump may ease sanctions on Iran after his former national
security adviser John Bolton, an Iran hawk, left the White House
earlier this week.
Brent crude LCOc1 futures fell 0.25% to $60.21 a barrel
while U.S. West Texas Intermediate (WTI) crude CLc1 was down
0.2% at $54.98.
ECB, German bunds Sept 13 https://tmsnrt.rs/2ZZJE1i
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(Editing by Sam Holmes and Jacqueline Wong)