Shares in Asia traded higher on Tuesday as investors monitor further developments on the U.S.-China trade front with the two economic powerhouses working toward a deal.
In Japan, the Nikkei 225 rose 0.42% in early trade while the Topix gained 0.65%. Shares of airliner ANA, however, fell more than 1% following a Nikkei report that the firm is expected to report a more than 20% drop in profit.
South Korea's Kospi also added 0.31%. Meanwhile, the S&P/ASX 200 in Australia rose about 0.2%, with the sectors trading mixed.
Overall, the MSCI Asia ex-Japan index traded 0.12% higher.
Investors will continue to watch for developments in U.S.-China trade. The Office of the U.S. Trade Representative said Monday that Washington will consider extending certain tariff exclusions on $34 billion worth of imports from China. The USTR said last week that China and the U.S. are close to finalizing a phase one deal.
For his part, U.S. President Donald Trump said the deal with China is expected to be signed "ahead of schedule," but did not elaborate on the timing, Reuters reported.
"The two sides have seemingly reached consensus in areas including standards used by agricultural regulators, but is probably worth noting that so far neither party has officially said anything about the contentious issue surrounding China's demand for a pullback on US Tariffs," Rodrigo Catril, senior foreign exchange strategist at National Australia Bank, wrote in a morning note.
Overnight on Wall Street, the S&P 500 scaled a record high as investors stateside cheered strong earnings and optimism on U.S.-China trade. The S&P 500 added 0.6% to close at 3,039.42 — above its previous record set on July 26. The Dow Jones Industrial Average rose 132.66 points to end its trading day at 27,090.72 while the Nasdaq Composite gained 1% to close at 8,325.99.
Of the 206 S&P 500 companies that reported through Monday morning, 78% have topped analyst expectations, according to FactSet.
Currencies and oil
The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 97.757 after touching highs above 97.8 yesterday.
The Japanese yen traded at 109.01 against the dollar after weakening from levels below 108.9 in the previous session. The Australian dollar changed hands at $0.6840 after touching highs above $0.684 yesterday.
Oil prices edged up in the morning of Asian trading hours, with international benchmark Brent crude futures adding 0.21% to $61.70 per barrel and U.S. crude futures edging fractionally higher to $55.84 per barrel.
What's on tap:
- Japan earnings: NTT Docomo, Nomura Holdings, NEC, ANA
- Australia: Reserve Bank of Australia Governor Philip Lowe speech at 2:45 p.m. HK/SIN
— CNBC's Lauren Hirsch and Fred Imbert contributed to this report.