HONG KONG: Asia markets rose modestly on Tuesday, with investors doubtful of any major breakthroughs in the latest round of US-China trade talks getting underway in Shanghai.
The two-day negotiations in the financial hub will be the first face-to-face discussions since negotiations collapsed in May, when US President Donald Trump accused China of reneging on its commitments.
Washington and Beijing have so far hit each other with punitive tariffs covering more than $360 billion in two-way trade in the yearlong dispute.
But little of substance is expected and both sides have worked to lower expectations ahead of the meeting.
“Realistically, this round of talks is about clarifying where the two sides stand after a significant lull in engagement," said Jake Parker, senior vice president at the US-China Business Council.
“There also needs to be a focus on rebuilding trust that was present in April but has since dissipated."
Hong Kong was up 0.5 percent and Shanghai rose 0.8 percent in morning trade.
– Central bank announcements –
The Bank of Japan kickstarted several major central bank announcements this week after wrapping up its policy meeting on Tuesday with a status quo announcement.
Tokyo was 0.7 percent higher at the break, with traders lacking a set of clear trading pegs from a raft of economic data released by the Japanese government before the opening bell.
Sydney was up 0.3 percent at lunch with the ASX200 blue chip index soaring to levels not seen since 2007, before the global financial crisis decimated world markets.
Australian shares have been steadily climbing since January, receiving a boost from lower interest rates and the re-election of the country's ruling conservative government.
Elsewhere in the region, Seoul pared Monday's losses to rise 0.6 percent in the morning, while Taipei was down 0.3 percent.
US Federal Reserve policymakers will also start a two-day meeting later Tuesday amid expectations of the first interest rate cut in a decade.
“Risk appetite will take a cue from how dovish the Fed turns," said OANDA senior market analyst Edward Moya.
“If the Fed remains data dependent, that would be viewed as hawkish and we could see the dollar surge and US equities fall under tremendous pressure."
Market optimism over central bank easing signals saw an uptick in oil futures, with West Texas and Brent benchmarks both up more than 0.5 percent in Tuesday trade.
Meanwhile the pound slipped against the dollar to its lowest levels since early 2017 amid firming expectations of a no-deal British withdrawal from the European Union and speculation that new Prime Minister Boris Johnson may take the country to the polls later this year.
“We see risk of at least another 10 percent fall for Sterling in the event of either a no-deal 31st October Brexit or an early election," said National Australia Bank's Ray Attrill.