[TOKYO] Asian shares pulled ahead to fresh 4-1/2-month highs on Thursday after the US Federal Reserve affirmed it would be "patient" on further interest rate rises and as Sino-US trade talks hinted of progress towards a deal in their tariff war.
MSCI's broadest index of Asia-Pacific shares outside Japan edged up 0.4 per cent to peak last seen in early October.
Australian shares rose 0.8 per cent while the Australian dollar seesawed in the wake of strong jobs data for January.
Japan's Nikkei was down 0.1 per cent by the midday break after closing at a two-month high on Wednesday.
Hong Kong's Hang Seng gained nearly 0.4 per cent to hit a more than six-month high reached during the previous session.
Chinese shares were up 0.3 per cent, near a more than half-year high.
Investors have been cheered over recent days by signs of progress in Sino-US trade talks. The trade war between the economic giants have roiled financial markets over the past year.
The United States and China have started to outline commitments in principle on the stickiest issues in their trade dispute, marking the most significant progress yet toward ending a seven-month trade war, sources familiar with the negotiations told Reuters.
"We must be a little bit careful that if the trade negotiation would be ended with a temporary success, that could in turn mean the Fed might restart their monetary tightening," said Yoshinori Shigemi, a global market strategist at JPMorgan Asset Management in Tokyo.
US President Donald Trump said on Tuesday that trade negotiations were going well and suggested he was open to pushing off the deadline to complete negotiations, saying March 1 was not a "magical" date.
On Wall Street, all three major US equity indexes ended in positive territory on Wednesday after minutes from the Fed's Jan 29-30 meeting indicated policymakers see little risk to leaving rates alone, for now.
"The bar to restarting rate hikes in the near term seems to be quite high, with several participants arguing that rate increases would be necessary "only if inflation outcomes were higher than in (the) baseline outlook"," Paul Ashworth, chief US economist at Capital Economics, said in a note.
"The upshot is we now expect the Fed to leave rates unchanged throughout this year, before a further deterioration in economic growth forces it to cut rates by a total of 75 basis points in 2020," he said.
The Fed signalled it will soon lay out a plan to stop letting go of US$4 trillion in bonds and other assets, though policymakers are still debating how long their newly adopted "patient" stance on US rates will last.
AUSSIE JUMPS, EURO STEADY
In the currency market, the Australian dollar was in the spotlight after employment numbers for January topped expectations.
The Aussie initially gained more than half a percent after the release of the figures, though it reversed course as the underlying soft outlook for the economy reinforced expectations of a possible rate cut this year.
The Aussie was last trading at US$0.71595, down 0.05 per cent on the day.
The euro held steady at US$1.1345. Purchasing manager indexes for the euro zone are due on Thursday and investors are also eyeing the release of minutes from the European Central Bank's January meeting later in the day.
Against the Japanese yen, the dollar was about 0.1 per cent lower at 110.80 yen, moving off a seven-week peak of 111.13 reached last week.
Japanese manufacturing activity contracted in February for the first time in two-and-a-half years as factories cut output amid shrinking domestic and export orders, a private business survey showed on Thursday.
The offshore Chinese yuan strengthened slightly to 6.7074 per dollar, touching its highest in about three weeks during the previous session.
The United States is seeking to secure a pledge from China it will not devalue its yuan as part of an agreement intended to end the countries' trade war, Bloomberg reported on Tuesday.
In the commodity market, crude prices rose more than 1 per cent on Wednesday to their highest in 2019 on hopes that oil markets will balance later this year.
Oil prices were also helped by output cuts from top producers and US sanctions on the Organization of the Petroleum Exporting Countries (Opec) members Iran and Venezuela.
US crude was last up 0.4 per cent, or 21 cents, at US$57.37 per barrel. Brent was 0.1 per cent, or 8 cents, higher at US$67.16.
Gold tacked on 0.1 per cent to US$1,339.90, close to a 10-month peak of US$1,346.70 scaled on Wednesday.