Asia stocks set to gain, yen drops on Mexico news

Employees work at the Tokyo Stock Exchange (TSE), operated by Japan Exchange Group Inc. (JPX), in Tokyo, Japan, on Friday, Dec. 28, 2018. Japanese shares fell, with the Topix index capping its worst annual performance since 2011, in a year that saw U.S.-China trade tensions deal a heavy blow to investor sentiment. Photographer: Kiyoshi Ota/Bloomberg

TOKYO: Asia stocks looked set for gains Monday and US equity futures climbed after President Donald Trump suspended his plans for tariffs on Mexico. The Mexican peso jumped the most in almost a year.

Japanese and Australian equity futures rose along with those on the S&P 500 Index after the US-Mexico agreement that was unveiled late Friday. The Japanese yen slid and crude oil climbed. Investor attention on the trade front may now focus on China, with the “main progress” in US-China talks reliant on Presidents Donald Trump and Xi Jinping at the G-20 summit late this month, Treasury Secretary Steven Mnuchin said. Treasury yields will open near recent lows after a weak US jobs report bolstered bets on Federal Reserve easing.

Chinese markets will re-open after a holiday Friday, when People’s Bank of China Governor Yi Gang said in an interview that there’s “tremendous room” to ease monetary policy if the trade war deepens. For their part, G-20 finance chiefs over the weekend warned about escalating risks to growth from trade and geopolitical tensions.

Investors are wagering that the recent spate of soft economic data will spur central banks into action to shore up growth. US stocks closed out their best week since November after the jobs report showed employers added the fewest workers in three months and wage gains cooled. Fed funds futures show a quarter-point cut almost fully priced in for July.

On the geopolitical front, Hong Kong’s Beijing-backed government faced new pressure to withdraw legislation easing extraditions to China after as many as 1 million people turned out to oppose the measure.