TOKYO: US stock futures and Asian shares rose on Monday after the United States dropped its threat to impose tariffs on Mexico in a deal to combat illegal migration from Central America, while weak US jobs data raised hopes for US interest rate cuts.
The Mexican peso jumped 1.75 per cent in early Monday trade to 19.2579 on the dollar on news of the removal of the tariff threat
But relief was widespread, as global investors had feared that opening up another trade conflict, while still battling with China, could tip the United States and other economies into recession.
S&P500 mini futures rose 0.4 per cent and the 10-year US Treasuries yield jumped back 3 basis points to 2.115 per cent , after hitting a 21-month low of 2.053 per cent on Friday on soft US jobs data.
Japan's Nikkei gained 1.2 per cent and South Korea's Kospi rose 0.55 per cent while Australian markets were closed for a holiday, with MSCI's index of Asia-Pacific shares outside Japan almost flat.
The improved risk sentiment also helped lift the dollar against the yen 0.15 per cent to 108.38 yen.
"The deal with Mexico is boosting sentiment while expectations of US rate cuts will be also supporting share prices," said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui DS Asset Management.
"Still, with limited progress seen so far in US-China trade talks, the most important issue for markets, stock prices will be able to rise only so much," he added.
Expectations the Fed will cut rates kept the dollar on the defensive after a weak jobs report from the US Labor Depa ..
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