Stocks gain on signs trade tensions may be easing

Global stocks surged on Friday as signs of possible trade talks between the US and China lifted risk sentiment after lacklustre earning results from tech bellwethers Apple and Amazon fuelled worries about the impact of a global trade war.

China said on Friday the United States has repeatedly expressed its willingness to negotiate on tariffs and that Beijing's door is open for talks, in a move that could ease trade tensions that have roiled global markets.

The pan-European STOXX 600 index was up 0.9 per cent in early Friday trading after registering its second consecutive monthly drop on Wednesday. Other regional indexes were also trading in positive territory.

The comments helped US stock futures reverse course from earlier falls after Apple trimmed its share buyback program and warned tariffs could add about $US900 million in costs this quarter.

Futures for S&P 500 rose 0.2 per cent while those for Nasdaq traded flat.

MSCI's broadest index of Asia-Pacific shares outside Japan rose to its highest level since March 20 at one point, recouping losses since US President Donald Trump kicked off a trade war with aggressive tariffs in early April.

Japan could use its $US1 trillion-plus holdings of US Treasuries as a card in trade talks with Washington, its finance minister said on Friday, raising explicitly for the first time its leverage as a massive creditor to the United States.

The remark came as top officials met for a second round of bilateral tariff talks.

"Washington's Achilles heel, in more than one sense, remains its federal debt," AJ Bell's investment director Russ Mould told Reuters, noting that payments on US debt have surpassed $US1 trillion a year.

"Trump and Bessent's plan to use tariffs to raise revenue could help, in theory ... but it is not clear they will be enough and Japan seems to be well aware of this," added Mould.

Japan's Nikkei closed more than one per cent higher with Hong Kong's Hang Seng up over 1.7 per cent. Mainland China was closed for a holiday.

Elsewhere in Asia, South Korea's Kospi rose 0.1 per cent to 2,558.84 and Australia's ASX 200 added 1.1 per cent, closing at 8,238.00.

Still, investor sentiment has churned as Trump's tariff policies that have sparked fears of a global economic downturn.

Data this week showed the US economy shrank for the first time in three years in the first quarter, while China's factory activity contracted at the fastest pace in 16 months in April.

Joseph Capurso, head of international and sustainable economics at Commonwealth Bank of Australia, said tariffs would sting as consumer prices rise.

"A recession will become likely if the price increases encourage consumers to cut spending and businesses to shrink workforces and cut capital spending. While a recession is not our baseline, it will be a close call this year."

The earnings season so far has underscored the cost of rapidly shifting US trade policy, with many companies slashing or pulling their profit forecasts.

Still, while investors were disheartened by the earnings from Apple and Amazon, strong results from Microsoft and Meta Platforms earlier in the week had raised hopes of weathering the tariff storm.

In currency markets, the Japanese yen strengthened to 144.88 per US dollar.

The Bank of Japan on Thursday sharply lowered growth forecasts and left interest rates on hold, suggesting the central bank could keep policy in a holding pattern.

That left the US dollar on course for a 0.4 per cent gain for the week ahead of the crucial non-farm payrolls data later in the day. The dollar index, which measures the US currency against six other units, fell to 99.88.

Nonfarm payrolls likely increased by 130,000 jobs last month after rising by 228,000 in March, a Reuters survey showed.

In commodities, gold prices rose to $US3,261 per ounce.

Oil prices slid after Reuters reported that Saudi Arabian officials are briefing allies that the country is unwilling to bolster markets with further supply cuts and it could handle a prolonged period of low prices.

Brent crude futures fell 39 cents to $US61.74, while US West Texas Intermediate crude futures lost 43 cents to $US58.18.

with AP